The applicants instituted a class action in the Federal Court against two insurers (the Commonwealth and QBE Insurance (Australia) Limited) in respect of property damage caused by a bushfire in Western Australia. Other proceedings relating to the bushfire had been brought in the Supreme Court of Western Australia, but it is not possible to bring a class action in that court. The Commonwealth and QBE asserted that the Federal Court did not have jurisdiction to hear and determine the matter and that the class action should be dismissed.

The court agreed. The fact that the case involved insurance policies and Commonwealth legislation – theInsurance Contracts Act 1984 (Cth) – did not mean that each and every issue in relation to the policies was necessarily a matter arising under federal law. The controversy between the parties did not involve any immediate right, duty or liability that depended for its existence on the Act and attracted the federal jurisdiction of the Court. Nor was the fact that the Commonwealth was a party to the proceedings a factor that gave the court jurisdiction over the proceedings.

You can access the reasons for judgment here.