Consideration
36 The applicable principles of construction were not in dispute. They have been summarised in LCA Marrickville Pty Limited v Swiss Re International SE [2022] FCAFC 17 at [2] and [56]-[103] (the appeal from Swiss Re), referring to Star Entertainment Group Limited v Chubb Insurance Australia Ltd [2022] FCAFC 16 at [8]-[15]. The fundamental principle remains that the issue is "not what each of the parties meant to say, but rather what is the objective meaning to be attributed to the words they have used to express what they have agreed": Star at [10].
37 It is necessary to recognise immediately that the issue of construction in this case was not considered in Wonkana, Swiss Re or LCA Marrickville. Each of these cases considered the relationship between the Quarantine Act and the Biosecurity Act in contexts different from the policy in the present case given the conformity clause. In Wonkana the principal issue was whether the Biosecurity Act was within the meaning of the phrase "and subsequent amendments" in the policy. In Swiss Re and LCA Marrickville the principal issue was whether the Biosecurity Act was a re-enactment of the Quarantine Act within the meaning of s 61A of the Property Law Act 1958 (Vic). In these decisions there are references to the Biosecurity Act having "replaced" the Quarantine Act (for example, Wonkana at [13], [42], [44], [106]; Swiss Re at [153]; LCA Marrickville at [219]). Those references do not answer the question whether the conformity clause, in saying that "[r]eferences to a statute law also includes all its amendments or replacements", operates so that the words "other diseases declared to be quarantinable diseases under the Australian Quarantine Act 1908" are to be construed as meaning "other listed human diseases under the Biosecurity Act 2015 (Cth)".
38 To the extent there was debate about it, the conformity clause forms part of the policy. The fact that the conformity clause is on a page headed "Information" and the contents of the page might otherwise fairly be described as containing information rather than operative provisions of the policy is immaterial. On its own terms the conformity clause is an operative provision which dictates how aspects of the policy are to be construed.
39 A reasonable business person in the position of the parties would understand that the phrase "a statute law" is not a technical, legal term or a term of art. It is a descriptive term in which the subject-matter is "law" and the kind of law described is "statute law". The words "a statute law" are apt to include a "law" which has as its source a statute. There is no commercial or logical reason to infer that in referring to "a statute law", the parties commonly intended to mean anything more than a "law" the source of which is a statute, whether the statutory source be direct or indirect, immediate or ultimate. In particular, it cannot be assumed or inferred that by "a statute law" the parties had in mind any distinction between primary legislation (made by a Parliament), and subordinate legislation (made by a person or body authorised by primary legislation) or legislative and non-legislative instruments. These are technical legal concepts which have no relevance to the generality of the description used in the conformity clause ("a statute law") or the evident purpose of that clause (to include amendments and replacements of "a statute law" in any reference to that law in the policy).
40 Rather, by "law", the parties mean only some legally enforceable or recognised right, duty, status or relationship. By "statute law", the parties mean only some legally enforceable or recognised right, duty, status or relationship the source of which, be it direct or indirect, immediate or ultimate, is a statute. In the conformity clause, "a statute law" is used to identify a class of law by reference to its opposite - that is, a "non-statute law". A "non-statute law" is any legally enforceable or recognised right, duty, status or relationship the source of which is other than a statute.
41 The distinction which the respondent seeks to draw between a "statute" and a provision of a statute, in the context of the conformity clause, is unsound. A "statute law" may encompass a statute as a whole or a specific provision of a statute. The relevant issue is whether the "statute law" under consideration, be it a statute as a whole or a specific provision of a statute, has been amended or replaced.
42 The distinction which the respondent seeks to draw between primary, and subordinate legislation and legislative (or non-legislative) instruments, is also unsound in the context of the conformity clause. Even if the conformity clause had simply referred to a "statute" rather than "a statute law" I would not accept that the reference was intended to take the technical, legal meaning of an Act of Parliament in contrast to subordinate legislation or a subordinate instrument made under an Act or subordinate legislation. For the reasons given, I do not construe "a statute law" as involving any such distinctions. Provided there is a "law" (a legally enforceable or recognised right, duty, status or relationship) and the source of that law is a statute, then that law is "a statute law" within the meaning of the conformity clause.
43 The respondent's submission that the parties could have referred in the conformity clause to subordinate legislation and executive acts under primary or subordinate legislation if they had been intended to be included within "a statute law" illegitimately pre-supposes that the parties had in mind the kind of technical, legal distinctions which exercise the minds of lawyers. That pre-supposition is illegitimate because it would not be supposed that reasonable commercial parties, dealing with an interpretative provision such as the relevant sentence in the conformity clause, would have in mind any technical, legal distinctions between different kinds of legislation. The commercial result which avoids commercial inconvenience is to recognise that "a statute law" is a general and broad phrase concerned with laws the source of which (be it direct or indirect, immediate or ultimate) is a statute.
44 I do not accept that the reference in the exclusion from cl 7 to "other diseases declared to be quarantinable diseases under the Australian Quarantine Act 1908" is merely a thing (a list of diseases) which has a legal status or character derived from an executive act by a particular person (the Governor-General) authorised by a statute. Under s 13(1)(ca) of the Quarantine Act the Governor-General could declare a disease to be a quarantinable disease. By the making of such a proclamation the legal status of a disease as a quarantinable disease was established under the Quarantine Act. That status enabled other actions to be taken including, for example, the declaration of an epidemic caused by a quarantinable disease (s 2B(1)), the giving of such directions and taking of such actions as the Minister thinks necessary to control and eradicate the epidemic (s 2B(2)), and the making of an instrument in writing authorising certain persons to give such directions and take such action (s 3).
45 The Quarantine Proclamation, being the instrument containing the declaration, is a "law" because it confers a certain legal status on the diseases declared to be quarantinable disease. The Quarantine Proclamation is a "statute law" because its source is s 13(1)(ca) of the Quarantine Act. The fact that the Quarantine Proclamation is an instrument made by the Governor-General under the Quarantine Act does not mean that the Quarantine Proclamation is not "a statute law". It is as much "a statute law" as the Quarantine Act itself.
46 The reference to the "statute law" in the exclusion to cl 7 of the policy needs to be understood in this way. That is, the phrase "other diseases declared to be quarantinable diseases under the Australian Quarantine Act 1908" as a whole is a reference to a "statute law". The reference is to diseases the legal status of which had been declared, with the effect of the declaration being to enable certain actions to be taken under the Quarantine Act. The reference to the "statute law" in the exclusion to cl 7, accordingly, is not simply "the Quarantine Act 1908". While that Act is a statute law, the reference in cl 7 is not to that Act as a whole. The reference is to the declaration under s 13(1)(ca). As that declaration establishes the legal status of a thing (the diseases) it is a "law", and as the source of that legal effect is a statute, the operative reference to "a statute law" for the purpose of the conformity clause is the whole of the phrase "other diseases declared to be quarantinable diseases under the Australian Quarantine Act 1908".
47 Accordingly, the question is whether that reference to "a statute law" in the exclusion to cl 7 (that is, "other diseases declared to be quarantinable diseases under the Australian Quarantine Act 1908"), has been replaced by "other listed human diseases under the Biosecurity Act 2015 (Cth)".
48 I accept that, depending on context, "replacement" has a range of ordinary meanings from the broad ("this for that") to the more narrow ("like for like"). Contrary to the submissions for the respondent, I do not consider that the text, context, and objects or purposes of the conformity clause indicate that the parties did not intend the broad meaning to apply. The high degree of certainty which the parties to a policy of insurance may be taken to have desired is better served by the ordinary broad meaning of "replacement". This means, as the conformity clause expressly states, "all" replacements of "a statute law" are included within the scope of the clause. Provided that the new statute law replaces (in the sense of applies instead of or in the place of) the old statute law, the conformity clause will operate. On the respondent's approach, however, it must be assumed that the parties intended that the operation of the conformity clause would depend on a detailed statute by statute or statutory provision by statutory provision comparison of the extent and materiality of any differences between the old and the new. This seems commercially implausible.
49 Accordingly, the text and object of the conformity clause both support giving the word "replacement" its ordinary broad meaning of "this for that". The text refers to "all" amendments and replacements. The reference to "all" and the use of the word "replacement" at large without any qualification indicate that the broad meaning of "replacement" was intended to have effect. The evident object or purpose of the clause is to ensure that references to statute laws in the policy remain current. There is no apparent justification for confining that object to amendments or replacements having the same or a substantially similar effect as the old statute law.
50 The concern which the respondent raised, that it would not be inferred that the parties intended a materially different (and unknown to the parties at the inception of the policy) statutory regime to have effect, is readily answered. In providing for "all replacements" of "a statute law to be within the scope of the conformity clause, the parties did not commit themselves to an arbitrary or capricious future. The context is references to a statute law in the policy. The parties may be taken to have known at least three matters. First, there is a limited number of references to a statute law in the policy (the Insurance Contracts Act 1984 (Cth) on pp 4 and 67, the Privacy Act 1988 (Cth) on p 8 and the Quarantine Act on p 33). Second, statute laws apply generally. Third, statute laws are laws made by Parliament or under Acts of Parliament.
51 Accordingly, while it may be accepted that the references to statute laws in the policy deal with important issues (such as the rights of cancellation of the policy under the Insurance Contracts Act on p 67), the parties can be taken to have known that any amendment to or replacement of a referenced statute law would be a result of an exercise of public power by persons exercising public responsibilities in the knowledge that the amendment or replacement would apply generally. That context works against any concern about arbitrary or capricious unknowns. It works in favour of ensuring that all references to a statute law are updated as required throughout the life of the policy to ensure the policy accords with current statutory regimes.
52 The conclusion in Swiss Re (affirmed in LCA Marrickville) that the Biosecurity Act and its provisions relating to the listing of human diseases (s 42 in particular) are not a re-enactment of the Quarantine Act and its provisions relating to the declaration of quarantinable diseases (s 13(1)(ca) in particular) turned on the technical, legal meaning of "re-enactment" in s 61A of the Property Law Act 1958 (Vic). The word "replacement" in the conformity clause does not take the same meaning as "re-enactment". Had the parties intended that technical, legal meaning to apply they would have used the word "re-enactment". "Replacement" requires only that the new statute law operates instead of the old statute law. This inquiry focuses on three facts: (a) has the old statute law ceased to operate (if not, the issue may be one of amendment rather than replacement), (b) has the new statute law commenced operation, and (c) can it be said that the new statute law is operating instead of or in the place of the old statute law. The question in (c) calls up for consideration the subject-matter of the old statute law and the new statute law. If the subject-matter of the laws is the same or sufficiently similar in substance then it can be said that the new statute law is operating instead of or in the place of the old statute law. This will be so whether or not the new statute law deals with that subject-matter in a new and radically different manner from the old statute law.
53 I accept that even on the construction which I prefer the application of the concepts of "replacement" (and "amendment") in the conformity clause may be contestable depending on the old and new statute laws under consideration. The scope for contest and uncertainty, however, is considerably less on my preferred construction than would result from the respondent's preferred construction, which would call for the kind of detailed analysis of the substance of the laws involved in the concept of "re-enactment".
54 In the present case the reference to the statute law, as noted, is "other diseases declared to be quarantinable diseases under the Australian Quarantine Act 1908". That is the old statute law which has ceased to operate as per question (a) above. The asserted new statute law is "other listed human diseases under the Biosecurity Act 2015 (Cth)". That new statute law has commenced operation as per question (b) above. Question (c) is whether it can be said that the new statute law operates instead of or in the place of the old statute law - that is, is the subject-matter of the laws the same or sufficiently similar in substance that it can be said the new statute law is operating instead of or in the place of the old statute law?
55 This question should be answered "yes" because the old and new statute laws are dealing with substantially the same subject-matter. The subject-matter is the identification of human diseases so as to enable the taking of steps by public officials to control and eradicate the identified disease. The fact that the old and new statutes deal with this subject-matter in fundamentally different ways does not change the fact that the new statute law is operating instead of or in the place of the old statute law in respect of identifying diseases to enable the taking of steps by public officials to control and eradicate the identified diseases.
56 It is immaterial that the power under s 13(1)(ca) of the Quarantine Act extended to pests whereas s 42 of the Biosecurity Act is confined to diseases. There may be another new statute law which is a replacement of s 13(1)(ca) in respect of pests, but that is irrelevant. The relevant issue in this case is confined to quarantinable diseases and the list under s 42 of the Biosecurity Act is the replacement for the declaration under s 13(1)(ca) of the Quarantine Act in respect of diseases.
57 It is also immaterial that: (a) the person empowered to make the declaration under s 13(1)(ca) of the Quarantine Act and the determination under s 42 of the Biosecurity Act are different, (b) there are criteria for the making of the determination in s 42 of the Biosecurity Act which did not appear in the Quarantine Act, and (c) the consequences of the making of a declaration and determination are different. The subject-matter remains substantially the same - the identification of human diseases so as to enable the taking of steps by public officials to control and eradicate the identified disease.
58 I do not accept that the reasonable reader of the conformity clause would understand the reference to a statute law to be a reference to a statute law as in force at the time of inception of the policy. Rather, they would understand the reference to be to any statute law mentioned in the policy whether or not it remained in force or in the form identified in the policy. This is because the focus of the relevant sentence in the conformity clause is not the statute law itself, but the reference to the statute law in the policy. It is also because the very purpose of the relevant sentence in the conformity clause is to ensure such references remain current from time to time. There is no justification for reading the conformity clause as restricted to amendments or replacements which come into effect after the inception of the policy. It would not be assumed or inferred that the parties to the policy were scrutinising all amendments and replacements to statute law mentioned in the policy to ensure that all such references were up to date as at inception of the policy. One purpose of the relevant sentence in the conformity clause is to ensure the parties did not have to do so. Another purpose is to ensure the references remain current throughout the life of the policy.
59 For these reasons the relevant sentence in the conformity clause is to be construed as the applicant proposes. The reference in the exclusion to cl 7 to "other diseases declared to be quarantinable diseases under the Australian Quarantine Act 1908" is a reference to a statute law. The relevant sentence in the conformity clause operates so that reference includes the statute law which replaces that statute law, being "other listed human diseases under the Biosecurity Act 2015 (Cth)". It follows that I will make the declaration sought by the applicant.
I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jagot.