The insureds operated a cropping farm in western New South Wales. They allowed hunters to stay on the property for a fee to hunt feral animals. The 16-year-old plaintiff accompanied his father, a licensed shooter, onto the farm for a hunting trip. They were put up in the shearers' quarters where a fire occurred while they were sleeping. The plaintiff was badly burnt and sued the insureds for negligence.
The insureds had two liability policies. Their QBE policy provided cover for 'legal liability to third parties for bodily injury ... caused by an occurrence in connection with the insureds' activity of allowing licensed shooters onto their properties for the purpose of hunting animals'. Their Wesfarmers policy covered the insureds for liability caused by an occurrence in connection with the farm business.
Both QBE and Wesfarmers maintained that their policy did not respond to the alleged liability. It was ultimately held that both policies responded.
QBE's argument was that there should be a narrow construction of its insuring clause because it should be understood in the context of other documents, including the Wesfarmers' policy. QBE argued that these documents established that its policy was only ever "intended" to be "gap cover" which was strictly limited to licensed shooters actually involved in hunting (as opposed to the sleeping teenage son of a hunter). The difficulty with this construction of the policy, as the New South Wales Court of Appeal unanimously put it, is "that is not what the words say."
The Court considered the documents relied on by QBE to provide context to the insuring clause were irrelevant. There was no evidence that the insured had been aware of those documents prior to entering into the contract of insurance. It was decided that the occurrence of an injury to one of the hunting party (including a non-shooting member of the party) is an occurrence in connection with allowing licensed shooters onto the property to hunt.
QBE then claimed a double insurance contribution from Wesfarmers on the basis that both policies covered the liability in question. Wesfarmers argued that allowing shooters onto the property for a fee was a separate business to the 'cropping farm' business and was therefore not covered by the insuring clause. The Court rejected that argument and held that using hunters to control feral animals was an activity which formed part of the insured farming business.
There was nothing in the policy inception documents which suggested cover was intended to be limited to certain farming activities and not others. Even if the activity was not part of the farming business, the policy would still respond because the occurrence (a fire in the shearers' quarters) was 'in connection with' the farm business.
QBE Insurance Australia Ltd v Vasic
Two related decisions of the New South Wales Supreme Court demonstrate yet again that the words 'in connection with' in insuring clauses will be given a broad and common sense application and that insurers face an up-hill battle in seeking to avoid liability by limiting the scope of an insuring clause, even when the 'intention' is that there be no cover!