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Quarantine Act back in focus in BI court hearing

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Business interruption insurance exclusion wordings citing the repealed Quarantine Act have come back into focus in the test case hearing currently before the Federal Court.

QBE has argued today that a travel company claim is not covered, with Section 61A of the Victorian Property Law Act having the effect of substituting in the Biosecurity Act for the repealed Quarantine Act.

The section of the law says that where an Act is “repealed and re-enacted” references in contracts will be taken as referring to the new Act.

Senior Counsel Ian Pike told the court that it was clear that the Biosecurity Act met the criteria as it essentially operated in the same way to address the same issues.

The Biosecurity Act was intended to be an updating, albeit with a more extensive reach, and there was “nothing radically different” compared to its predecessor, he said.

“They are both directed at the same end,” he said. “And they do so by essentially the same means.”

Mr Pike argued that it was also clear that Section 61A applied to Commonwealth legislation and not just Victorian laws.

The matter, QBE v David Coyne in his capacity as liquidator of Educational World Travel, is being heard alongside the nine claims brought forward by the Insurance Council of Australia in the second test case, after they went to the Australian Financial Complaints Authority.

The Victorian law issue has also been raised during the hearing in the claim dispute involving IAG and Melbourne-based Meridian Travel and has relevance for another matter involving Chubb and a landlord claim.

In the Meridian case, it has also been argued the policy comes under the Victorian Act as it was issued in that state and it was irrelevant that the broker’s address was in NSW.

The NSW Court of Appeal found in the first test case that wordings citing the Quarantine Act and subsequent amendments could not be taken as including the Biosecurity Act. But the Victorian law issue wasn’t argued in that matter.

A court decision relating to the Property Law Act coverage restriction would only impact BI claims where the contract is governed by Victorian law.

The Federal Court hearing before Justice Jayne Jagot is expected to continue until Wednesday.