Outback Music Festival Group Pty Ltd (formerly known as Big Run Events Pty Ltd) v Everest Syndicate 2786 at Lloyd's

The Policy 5 The Policy comprises a policy wording which includes a schedule (headed "Risk Details"). The period of insurance spanned from 30 September 2019 to 10 July 2020. The following clauses of the Policy are of note. 6 Under the heading "Claims Notification Procedure" the Policy provides: It is essential that any claims or circumstances that might give rise to a claim are notified in accordance with the terms of the policy wording and failure to comply with this may prejudice your claim. … … As with any insurance, the onus rests with you to prove the loss in the event of a claim, and in this regard the following points should be specifically noted, although this is not an exhaustive list and is for guidance only: - • … • If the show is cancelled by local authorities and/or the police: confirmation must be obtained in writing from the authority concerned. (emphasis added) 7 Clause 1 of the Policy is in the following terms: 1. INSURING CLAUSE Subject always to the terms, conditions, limitations and exclusions contained herein or endorsed hereon: 1.1 This Insurance is to indemnify the Assured for their Ascertained Net Loss should any Insured Event(s) be necessarily Cancelled, Abandoned, Postponed, Interrupted, Curtailed or Relocated, which necessary Cancellation, Abandonment, Postponement, Interruption, Curtailment or Relocation is the sole and direct result of a cause not otherwise excluded which occurs during the period of insurance and is beyond the control of the Assured and the Participant. 1.2 This Insurance also indemnifies the Assured for proven additional costs or charges reasonably and necessarily paid by the Assured to avoid or diminish a loss payable hereunder, provided such additional costs or charges do not exceed the amount of loss thereby avoided or diminished. 1.3 The Underwriters' maximum liability shall not exceed the Limit of Indemnity stated in the Schedule for the relevant Insured Event(s) nor the Aggregate Limit of Indemnity stated in the Schedule. 8 Clause 3.6 defines "cancellation" or "cancelled" as "the inability to proceed with the Insured Event(s) prior to commencement". 9 The chapeau to the "Conditions Precedent" section provides that "[t]he Underwriters shall not be liable to pay any claim hereunder unless the Assured complies with the following Conditions Precedent". Relevantly, condition precedent 4.5 requires that the Assured "observe and comply with the requirements of any law, ordinance, court or regulatory body of whatever jurisdiction". 10 The chapeau to the exclusions section provides: "This Insurance does not cover any loss directly or indirectly arising out of, contributed to by, or resulting from" the enumerated exclusions. Exclusion 6.20, upon which the respondent insurers rely, is in the following terms: any communicable disease or threat or fear of communicable disease (whether actual or perceived) which leads to: (6.20.1) the imposition of quarantine or restriction in movement of people or animals by any national or international body or agency; (6.20.2) any travel advisory or warning being issued by a national or international body or agency. 11 Exclusion 6.10 is of relevance, insofar as it excludes loss arising from the Assured failing to: (6.10.1) observe and comply with the requirements of any law, ordinance, court or regulatory body of whatever jurisdiction. 12 Exclusion 6.12 is of relevance: civil commotion assuming the proportions of or amounting to a popular uprising, riot, martial law or the act of any lawfully constituted authority in the furtherance of maintaining public order. (emphasis added) 13 Further, exclusion 6.13 is in the following terms: seizure or destruction under quarantine or customs regulations, confiscation, nationalisation or requisition or destruction of or damage to property, by or under the order of any government or public or local authority, or the handling of contraband or the engaging in illicit trade or transportation. (emphasis added) 14 Exclusion 6.21 provides that the Policy does not cover any loss directly or indirectly arising out of, contributed to by, or resulting from "national, court or religious mourning whether declared or not" (emphasis added).

The applicant's submissions 15 The primary submission of the applicant was that, in the circumstances and properly construed, exclusion 6.20 does not apply. This, it was submitted, was because the requisite "elements" of exclusion 6.20 were not satisfied. It was put by the applicant in its written submissions that: [t]he loss (from the cancellation of the Insured Event) did not directly or indirectly arise out of and was not contributed by or result from [COVID-19] which led to the imposition of quarantine or restriction in movement of people or any travel advisory or warning by a national or international body or agency. (emphasis in original) 16 The applicant contended at [26] of its outline of written submissions that it did not argue that the loss was relevantly caused by State border closures, as opposed to any act of a 'national body'. Rather, the applicant contended that the loss was caused by COVID-19 and the insurmountable risks presented by that pandemic in terms of health and safety, operational, and reputational issues. Distilled down to its essence, the applicant's argument was that COVID-19, as a communicable disease, did cause the applicant's loss, but that it was the virus itself, as opposed to measures implemented by the various governments with a view to minimising the damage occasioned by that virus, that was causative of the loss. The submission at [26] appears to be at odds with what the applicant went on to submit. 17 On the applicant's submission, the "proper" construction of exclusion 6.20 begins with consideration of the meaning of the undefined term "loss" as it appears in the chapeau to the exclusions. The applicant submitted that, in the sense that the loss flows from the cancellation, it would follow that a determination of the cause of the loss requires an examination of the reasons for the cancellation. That should be accepted.

The reasons for cancellation 18 The applicant contended that the reasons for the cancellation of the Insured Event were to be found in the minutes of the meeting on 24 March 2020, in which Mr Donovan, as sole shareholder and Managing Director of Big Run Events, made the cancellation decision. The minutes of that meeting, which were hand-written and subsequently typed by Mr Donovan, set out the reasons for that decision. Those minutes, being annexure GRD2 of the affidavit of Gregory Rex Donovan, affirmed on 15 June 2021, provide: The current situation is that all Australian state borders other than the NSW/Victorian border are closed including Queensland borders where the event is held. Whilst these closures don't officially extend out to the time of the event. It [sic] is not known if these border closures will be lifted before the time of the event. Borders and access would need to open up some time before the event to allow access to the event team for event set up, and of course for patrons to be able to travel to the event. The current situation within Australia includes restrictions on gatherings, events, travel, and social distancing. We believe that these would also need to be lifted before the event, to enable the delivery of the event. The Prime Minister has told Australians' [sic] that he expects restrictions to normal life to last for at least 6 months, so the likely hood [sic] of these being fully lifted by early to mid-June would seem very low at this point. Most Queensland outback towns and shires are discouraging tourists and travellers from coming to their towns, to keep their shires [sic] residents safe and free of the virus. … The Diamantina Shire Council is urging us as organisers of the Big Red Bash to put the health and safety of their local population first as we decide whether or not to cancel the Big Red Bash. 19 The minutes record that the relevant stakeholders considered there to be three overarching risks or challenges associated with the COVID-19 pandemic, being: health and safety risks; operational challenges; and reputational risks. 20 Under the heading "Health and Safety" those present at the meeting considered the location of the event and access to healthcare in the event that attendees of the music festival were to contract COVID-19. The minutes provide that there was no intensive care unit, nor were there any ventilators at the Birdsville medical clinic. The minutes further provide that the medical service contracted to Queensland Ambulance Service would be insufficient to attend to the medical needs of attendees at the Insured Event who had contracted COVID-19. It was further noted that the festival would pose a risk of exposure to remote and rural towns through which attendees of the festival travel. 21 Under the heading "Operational" the minutes record the operational challenges posed by COVID-19. With respect to volunteers, the minutes record that there is a high risk of dropouts due to "concerns about the virus and being so far away from home" and that a "dropout rate of 20% or more" would result in the event becoming "impossible to manage". With respect to food vans, the minutes record the following: … With tourists being discouraged to travel to the outback, and all other outback events cancelled, none of them are now planning to make the trip as it is not viable for them to travel so far to trade at just one single event … We don't believe it would be possible to run the event without food vans. 22 The minutes went on to consider the operational challenges caused by interruptions to air travel: With the airline industry in turmoil Regional Express the only carrier providing flights to and from Birdsville recently suspended all flights throughout Outback Queensland, including Birdsville. Soon after they reinstated a limited and reduced service but stated that the continuation of this service was not guaranteed and will be subject to regular review. The event being so remote relies on the normal operation of flights into and out of Birdsville to be able to transport artists, bands and crew. … Without an air service there can be no event. 23 Under the subheading "Road access" the minutes provide: State border closures and travel restrictions that are currently in place would prevent the event going ahead should they end up being extended to cover the period shortly before and during the event. 24 The minutes went on to consider "Council Support", noting that the relevant local councils had, in effect, requested the applicant to cancel the event in order to protect the health of their residents. It was recorded that the attendees of the meeting had "serious concerns that if [they were] to go against the wishes of the local council and proceeded with the event … [it would] threaten the ongoing viability of the event", and, indeed, if the event were to proceed that "they may look to make further decisions tor [sic] directives to effectively force [the applicant] to cancel". 25 Under the heading "Reputational" the event organisers noted that "planning to run an event in an environment that is not safe and is against the express wishes of key stakeholders places an unacceptable level of risk to the events [sic] brand and reputation". The minutes then went on to address those reputational issues with respect to various bodies and classes of people, being: patrons; volunteers; sponsors; council; local communities; and State government. The fundamental concern with respect to each of these groups was the reputational consequences if the event were to go ahead. 26 Under the heading "Decision" the minutes record the decision of the organisers as follows: There are an extensive number of significant and difficult to mitigate health and operational risks and challenges that currently exist and are expected to continue to exist through to event time. There are also significant associated potential reputational risks should the event proceed, which would pose a significant risk to the ongoing viability of the event. In this situation there would be no experienced, professional and responsible event organisation willing to continue on with planning and investing in the delivery of the event under these circumstances. As a result, we have decided that our only option is to cancel the event.

The causal connectors 27 The applicant further submitted that the causal connectors in exclusion 6.20 ought each to be considered in isolation to determine their meaning, and the relevant semantic differences as between the various connectors. On this submission, consideration of those causal connectors leads one to consider the reasons for the applicant's cancellation of the Insured Event, and again, counsel for the applicant pointed to the minutes.

The elements of exclusion 6.20 28 The applicant further submitted that each of the "elements" of exclusion 6.20 must be satisfied in order for that exclusion to apply. That is, that COVID-19 must be a communicable disease, which the applicant accepted, that furthermore has led to the imposition of quarantine, a restriction in movement or any travel advisory or warning by a national or international body or agency which is causally connected to the loss. The applicant further submitted that such an imposition of quarantine, restriction in movement or travel warning must have force of law, insofar as exclusion 6.20 is to be construed congruently with condition precedent 4.5, which excludes liability to pay a claim to the extent that the Insured fails to observe the requirements of any law, ordinance, court or regulatory body of whatever jurisdiction. 29 The issue with this submission, which I will turn to more fully in due course, is that it neglects to consider that the "elements" of exclusion 6.20 may not enumerate further or separate exclusions, or operative elements of the exclusion, but rather form part of the description of the communicable disease, or the threat or fear thereof. That is, only loss occasioned by communicable diseases, or the threat or fear of communicable diseases, which lead to restrictions in movement, quarantine, or travel advisories or warnings is excluded. That is, an alternative constructional choice would be to view 6.20.1 and 6.20.2 not as separate exclusions or operative elements of the exclusion, but rather as descriptive or qualificatory of the nature of the disease which, directly or indirectly causes, gives rise to, or contributes to the relevant loss. 30 The applicant submitted that "national or international body or agency" must refer to a Commonwealth (being federal) or international body or agency, as opposed to a State or local government. In support of this submission, the applicant raised three matters. First, the applicant submitted that, in light of the fact that the Policy is an international wording, the phrase "national or international" ought to be understood according to its natural and ordinary meaning which, on the applicant's submission does not include State or local governments. 31 Secondly, the applicant submitted that the reference in the Claims Notification Procedure section to "local authorities" and police serves to illuminate the narrow meaning of the word "national" within the Policy. This conclusion, it was submitted, is reinforced by the presence of condition precedent 4.5 and exclusion 6.10.1 as set out at [9] and [11] above which refer to authorities of "whatever jurisdiction". The applicant submitted that the Insurers must be taken not to have intended to refer to all jurisdictions in exclusion 6.20, in light of the express reference to all jurisdictions in those clauses, and the omission to use the same language in exclusion 6.20. 32 Thirdly, the applicant submitted that the use of the words "agency" and "body" serve to recognise the international context of the Policy, rather than indicating a recognition of bodies or agencies which span various jurisdictions within a particular country. 33 The applicant conceded that management of the COVID-19 pandemic has been a collaborative effort as between the federal and State and territory governments, but that, ultimately, the responsibility for border closures nonetheless remained with the States. It was submitted that the National Cabinet is not a committee of the federal cabinet, but rather an intergovernmental body comprised of the political leaders of the Commonwealth, States and territories. The applicant submitted that the Prime Minister was not a national body or agency, and that the statements of the Prime Minister did not have the requisite force of law. The applicant further submitted that restrictions upon gatherings fall outside of the meaning, narrowly construed, of "restriction in movement of people" or travel advisories or warnings. 34 Further, the applicant submitted that if the respondents were to succeed with respect to the engagement of exclusion 6.20, s 54 of the Insurance Contracts Act 1984 (Cth) would be enlivened. This, it was said, was because the imposition of restrictions on movement would amount to an act by some other person subsequent to entry into the contract. The applicant reiterated its submission that those restrictions themselves were not causative of the applicant's loss, but rather COVID-19 was the cause of loss and thus s 54(3) of the Insurance Contracts Act was engaged. Further, the applicant submitted that those acts imposing restrictions upon movement were necessary to protect the safety of various persons, within the meaning of s 54(5)(a). 35 Finally, the applicant submitted that reliance by the respondent Insurers upon exclusion 6.20 amounted to a failure to act with utmost good faith. The applicant contended that the unfairness and unreasonableness of the respondents' reliance on exclusion 6.20 can be measured by reference to the impact of that reliance on the applicant within the factual context of this controversy. It was submitted that reliance on the exclusion would be generative of unfairness in light of the applicant's decision to cancel the event to promote the safety of those involved.

The respondents' submissions 36 The respondents' submissions were structured in four parts, looking first at the meaning of "cancellation" within the Policy. The respondents then turned to exclusion 6.20 and its elements, notably, the meaning and significance of the phrase "national or international body or agency" within the clause. The respondents then considered ss 54 and 14 of the Insurance Contracts Act in two discrete, and brief, submissions.

Cancellation 37 The respondents submitted that, having regard to the definition of "cancellation" within the Policy, the parties could not have had in mind engagement of the indemnity by an Insured's decision to cancel, and their subjective reasons for that cancellation. Rather, the respondents submitted, there must be an objectively determined inability to proceed. That is, the question as to whether there was an inability to proceed is a question of fact, to be determined by the Court on the basis of an objective assessment of all of the evidence: Kooragang Cement Pty Ltd v Bates (1994) 35 NSWLR 452. 38 The respondents submitted that it was plain from a reading of the Policy, and the applicable authorities, that the Insured's account to the Insurers of the elements and circumstances leading to the cancellation decision must be truthful, comprehensive, co-operative, objective and responsive to the proper inquiry from the Insurers. It was submitted that the various characterisations of the reason or reasons for cancellation given by the applicant were not congruent with either the minutes, as recorded by Mr Donovan, nor other aspects of Mr Donovan's evidence. The respondents' submissions placed significant emphasis on a letter, dated 2 November 2020, in which the applicant's solicitors set out the claim in the following manner: Previous Big Red Bash events have drawn national crowds of about 9,000 people from every State in Australia. Historically, about 65% of attendees travel from interstate. As far as our client is aware, there have been either no or very few attendees from overseas. The 2020 event was sold out at the time of the cancellation with a crowd of over 10,000 expected to attend. As at 24 March 2020, The Queensland government had closed its borders and at that stage the likelihood of this border closure being lifted in time for the Event appeared very low. In addition, at that time, most Queensland outback towns and shires were discouraging tourists and travellers from coming to their areas. All Queensland outback events through to August 2020 that were run by local communities and organisations had already been cancelled to discourage tourists from entering. Examples include Boulia Camel Races (July), Bedourie Pig and Camel Races (July), Music in the Mulga (May), Mount Isa Rodeo (August), Julia Creek Dirt n Dust Festival (April), and many more. … [Exclusion 6.20], by its terms, has no application to our client's claim. The proximate cause of the loss and the Event cancellation was State border closure and in particular border closure by the Queensland State government. The Queensland State government is not a "national or international body or agency". … The principal reason for the cancellation of the Event was that the vast majority of ticketholders and volunteers, as well as the event organizers and suppliers would be unable to attend due to the border restrictions imposed by the Queensland State government which were in existence at the time the cancellation was made and were not expected to be lifted in time for the staging of the Event.

Exclusion 6.20 39 In their written submissions, the respondents examined each of the "elements" of exclusion 6.20. The respondents submitted that none of the phrases "directly or indirectly", "arising out of", "contributed to by" and "resulting from" indicate that the doctrine of immediate proximate cause is to apply: Oei v Foster [1982] 2 Lloyd's Rep 170 at 174; Hi-Fert Pty Ltd v Kiukiang Maritime Carriers Inc (No 5) [1998] FCA 1485; 90 FCR 1; Erect Safe Scaffolding (Aust) Pty Ltd v Sutton [2008] NSWCA 114; 72 NSWLR 1; Kooragang (1994) 35 NSWLR 452. 40 The respondents submitted that the loss in question directly or indirectly arose out of, was contributed to by, or resulted from a communicable disease. The letter of 2 November 2020, extracted at [38] above, was said to be strong evidence that the communicable disease led to a restriction in movement which caused the loss in question, and was the principal reason for cancellation. The respondent further submitted that the applicant's minutes demonstrate that COVID-19, as a communicable disease, led to restrictions upon travel and gatherings. Indeed, those minutes provide that the event would be unable to proceed unless those restrictions were lifted: see [18] above.

National or international body or agency 41 In response to the applicant's submission that, notwithstanding a certain degree of collaboration as between the Commonwealth and State governments, responsibility for border closures ultimately remained with the States, the respondents submitted that such an understanding of the Policy would fail to give effect to the ordinary meaning of the terms of that Policy as utilised, and would produce an uncommercial result. The respondents submitted that the natural and ordinary meaning of the word national is "of, relating to or maintained by a nation as a whole or independent political unit". Whereas the word "international" means "between or among nations". On this submission, the use of the two terms disjunctively establishes a dichotomy between the independent nation, and a group of nations: it reflects the difference between international and domestic authority. That is, the real distinction is between acts by international or domestic bodies or agencies: it is a recognition that restrictions may be imposed by international bodies such as the World Health Organisation, or domestically, within a nation state, by any entity which has the necessary authority and power in the relevant domestic jurisdiction. In support of this submission, the respondents made note of the nature of the Policy as an international wording. On this basis, the respondents submitted that there was no indication that the parties intended to apply the exclusion strictly within the confines of the idiosyncratic Australian federation. This was underscored, it was submitted, by the express recognition within the Policy of entities such as local authorities and police, which do not necessarily act under the auspices of either State or Commonwealth governments. Indeed, the respondents drew attention to the absence of the word "governments" in exclusion 6.20, and the use of the terms "agency" and "body" instead: this, it was said, may be seen as a recognition that the actions to which the exclusion is directed might be taken by a wide variety of authorised entities in a wide variety of jurisdictions. 42 The respondents submitted that the collaborative pandemic management effort, directed by the National Cabinet and the Australian Health Protection Principal Committee (AHPPC) was done by "national" bodies or agencies. 43 Further, the respondents adopted in oral argument the construction of exclusion 6.20 discussed at [29] above. 44 The respondents further submitted that this is not a case for the application of either s 54 or s 14 of the Insurance Contracts Act.

The evidence 45 It was not disputed that COVID-19 is a "communicable disease" within the ordinary meaning of that phrase, nor was it disputed that COVID-19 and its attendant operational and human risks prompted the cancellation decision. What was in dispute between the parties was whether, this notwithstanding, the terms of exclusion 6.20 were satisfied in this case: it emerges from the text of the Policy that the fundamental controversy in the proceedings was whether National Cabinet can be seen as a national body, that is, a body which represents the nation in some form, or, alternatively, whether restrictions in movement, and travel advisories and warnings were imposed by State governments, bodies or agencies.

National Cabinet and national co-ordination of COVID -19 response 46 The evidence as to the nature (national or otherwise) of National Cabinet, and the responsibility for the imposition of restrictions as between the various Australian governments was, with respect, sparse. No objection was taken to the form of the evidence. That evidence must, however, be parsed in some detail in order to reach a conclusion as to whether the terms of exclusion 6.20 are satisfied. 47 The majority of the evidence addressing COVID-19 response arrangements by the Commonwealth and by the State and Territory governments was provided as annexures to the affidavits of Damien Ignatius Arnold Lambert van Brunschot, affirmed 25 June 2021, and 28 June 2021, and the affidavit of David Gregory McGrath, affirmed 16 July 2021. 48 A media release of Prime Minister Scott Morrison, dated 13 March 2020 and annexed to the first affidavit of Mr van Brunschot outlined the composition of National Cabinet, being "made up of the Prime Minister, Premier and Chief Ministers". The composition of the AHPPC was said to be "led by the Commonwealth's Chief Medical Officer and comprising of the chief health and medical officers from each jurisdiction". A "National Coordination Mechanism" convened by the Department of Home Affairs was said to work across all jurisdictions, industry and key stakeholders to ensure a "consistent approach" to managing the impacts of the pandemic. 49 The document entitled "National Emergency and Disaster Response Arrangements in Australia: A Quick Guide" dated 28 April 2020 and found at Annexure DGM1 of the affidavit of David Gregory McGrath affirmed 16 July 2021, is of particular relevance. It provides as follows: National coordination arrangements for emergencies are well established. The foundation of Australia's current arrangements, the National Strategy for Disaster Resilience, has been in place since 2011. Whole-of government arrangements have been developed that are designed to be applicable in any emergency or crisis. These arrangements are known as the Australian Government Crisis Management Framework (December 2017) (AGCMF). The AGCMF distinguishes between 'Australian' (referring to Commonwealth bodies and arrangements) and 'national' (referring to Commonwealth, state and territory bodies and arrangements). … … According to the AGCMF: 'States and territories have primary responsibility for the protection of life, property and the environment within the bounds of their jurisdiction. They control most functions essential for effective crisis prevention, preparedness, response and recovery. However, where crises involve actual or potential national consequences there may be a need for high level collaboration and coordination within and across all levels of government'. 50 The document titled "Australian COVID-19 Response Management Arrangements: A Quick Guide" found at Annexure DGM2 of Mr McGrath's affidavit provides that the "planned response to a national public health crisis involves action by the whole of government". The document later details that "[w]hile many of the initial responses to the COVID-19 pandemic were executive actions or implemented by state and territory legislation, Commonwealth legislation was required to implement planned Government spending measures". 51 The "Australian Health Sector Emergency Response Plan for Novel Coronavirus (COVID-19)", found at Annexure DGM5 of Mr McGrath's affidavit provides as follows: The activities required to support our community during this novel coronavirus outbreak will involve state and territory governments, the Australian government and many other health sector parties. Coordination and communication at the national level will be particularly important during our current active response. … This plan … is supported by the Emergency Response Plan for Communicable Diseases Incidents of National Significance: National Arrangements (National CD Plan) … The National CD Plan outlines how non-health sector agencies will support the health sector response and how agencies across Australian, state, territory and local governments will work together to protect Australia from the threat of a major communicable disease outbreak. … The COVID-19 Plan acknowledges that the primary responsibility for managing the impact of the novel coronavirus lies with the state and territory governments and that each jurisdiction will have its own plans and protocols. Therefore the majority of operational detail will be found in these plans. 52 It goes on to outline the responsibilities of the Australian government, and the various state governments: … The Australian Government maintains the COVID-19 Plan to prepare for and respond to a novel coronavirus outbreak, with input from the states and territories, and other health sector stakeholders. … … The Australian Government and state and territory governments will work together to provide advice and leadership on the appropriate methods and timing for implementing public health measures. … State and territory governments are responsible for the operational aspects of public health responses. They will … implement social distancing measures as per national recommendations and local risk assessments; and implement infection control guidelines and healthcare safety and quality standards. … … The COVID-19 Plan will guide the management of a novel coronavirus outbreak at the national health sector level, representing an approach agreed between the Australian Government and the state and territory governments. … Reflecting a flexible approach, choices may vary to reflect the jurisdictional context, particularly in relation to timing of implementation and stand down, however negotiation within COVID-19 Plan will ensure a coordinated and consistent approach. … The flexible approach [to the implementation of COVID-19 responses] means Targeted Action measures need not be adopted by all jurisdictions concurrently. Similarly, measures may be implemented differently within geographic regions and jurisdictions. … 53 Various media statements of Prime Minister Scott Morrison were annexed to the affidavits of Mr van Brunschot. The Prime Minister's statement of 13 March 2020 provided that "Commonwealth, State and Territory governments have agreed to provide public health advice against holding non-essential, organised public gatherings of more than 500 people" on the advice of the AHPPC. This was advice of a national body against organised gatherings of more than 500 people, though, albeit from a national body, not strictly falling within 6.20.1 or 6.20.2. 54 In the Prime Minister's media release of 16 March 2020, it was stated that the Australian Government "had imposed a universal self-isolation requirement on all international arrivals". It also stated that the Australian Government had "banned cruise ships from foreign ports … from arriving at Australian ports for an initial 30 days … [from] 15 March." Such amounted to the imposition of quarantine or restriction in movement of people by a national body, the Australian Government. The media release also stated that the National Cabinet had endorsed the advice of the AHPPC "to further introduce social distancing measures … [including] the requirement that non-essential, organised public gatherings of more than 500 people should not occur." Here, a national body (National Cabinet) was endorsing the recommendation of another national body (the AHPPC). Whilst strictly not dealing with travel in the sense of tourism or holiday travel in terms, it was at the very least a warning by a national body against movement of people to places of gatherings, and in that sense travel to such gatherings. 55 In the Prime Minister's statement of 18 March 2020, the advice of the AHPPC against gatherings of more than 100 people was reiterated. This can be seen as a prohibition by a national body on gatherings of 100 or more people. The Prime Minister then stated that "there may be [outdoor gatherings of more than 500 people] that are considered to be essential and it is at the discretion of the individual State and Territory Chief Medical Officers … to assess each on their merits". The Prime Minister further stated that "National Cabinet agreed that all Australians should only consider travelling when it is essential". This was in terms a travel warning by a national body (National Cabinet). The statement also described heightened travel restrictions pursuant to a decision of the National Security Committee of Cabinet that anyone arriving in Australia from overseas including Australian citizens and permanent residents will be required to self-isolate for 14 days from the date of arrival. This was the imposition of quarantine or restriction on movement of people by a national body (the National Security Committee of Cabinet itself and the imposition in law by the Australian Government). The statement also recorded that National Cabinet "urged Australians to continue to … [avoid] any non-essential travel." This was a further travel advisory or warning by a national body (National Cabinet). 56 The Prime Minister's statements of 20 and 22 March 2020 both provide that National Cabinet agreed upon further restrictions on social gatherings and social movements to which the "State Premiers and Chief Ministers agreed" to give effect through their own legislative processes. This evidenced the imposition of restriction in movement of people by a national body (National Cabinet). The media statement of 20 March 2020 recorded that National Cabinet "welcomed the Commonwealth government's decision to stop the entry of non-citizens and non-permanent residents and their immediate families into Australia after … 9pm AEDT 20 March 2020". This was evidence of the imposition of quarantine or restriction in movement of people by a national body (the Australian Government).

Consideration and disposition 57 The insuring clause was engaged in the sense that on any view of the reasons for the cancellation, the event had to be cancelled. It was clearly a matter of necessity. The unfolding pandemic made it almost certain that few if any people would be able to travel and also that even if people could get to the event, it would be dangerous and fraught operationally to conduct the festival. 58 The only issue is the application of exclusion 6.20 and thus whether it could be said that the cancellation was the sole and direct result of a cause not otherwise excluded. Thus the question is whether any loss (that is the cancellation from which financial loss flowed) was in any way caused or contributed to by or arose out of or resulted from: any communicable disease or threat or fear of communicable disease (actual or perceived) which leads to: (6.20.1) the imposition of quarantine or restriction in movement of people … by any national … body or agency; (6.20.2) any travel advisory or warning being issued by a national … body or agency. 59 The applicant advanced a construction of the exclusion which gave primacy to the sub-clauses over the clause, inverting the order of the text as it appears in the Policy. This construction required a causal relationship between the quarantine, restrictions in movement, and travel advisories and warnings enumerated in sub-clauses 6.20.1 and 6.20.2 and the loss suffered by the applicant. To a degree, as can be seen in the arguments of the respondents set out above, the respondents engaged with this way of reading exclusion 6.20, although they did adopt the construction which placed the communicable disease or the threat or fear of it as the causative element: see [29] above. 60 At [24] of its submissions, the applicant contended that "[i]t is the Respondents' burden to prove on a narrow construction of exclusion 6.20 that the loss was relevantly causally connected to a restriction in movement of people or any travel advisory or warning by a national or international body". At [42] the applicant submitted that the exclusion is not enlivened as "Australian state border closures were mentioned in the 'Background' section of the Minutes … and therefore were not the cause of cancellation and loss". Finally, at [44] the applicant submitted that it had to decide whether to cancel the Insured Event because of the [COVID-19] pandemic. The decision to cancel was based on an assessment of health and safety risks, operational risks and reputational risks. … It was not made because of any imposition of restriction in movement of people or any travel advisory or warning by a national or international body or agency. 61 The respondents submitted, at [35] of their submissions, that "the communicable disease led to a restriction on travel … [and] an inability to proceed [with the Insured Event] unless these restrictions were lifted [which] is to say, there was a causal connection to the cancellation loss". At [41] of the respondents' submissions, it was contended that the "restrictions on movement and the travel warnings … were causally relevant to the cancellation". 62 This construction of the exclusion inverts the order of the clauses such that loss, directly or indirectly arising out of, contributed to by, or resulting from the imposition of quarantine, or restriction in movement, or travel advisories or warnings by a national body or agency, due to or brought about by communicable disease or the fear or threat of communicable disease, would be excluded. The causal connectors in the chapeau to the exclusion must, on this construction, relate to the restrictions enumerated in the sub-clauses, as opposed to the communicable disease itself. The construction would involve a rewriting of the exclusion. 63 The text of the clause, read in the context of the Policy in its entirety, makes clear the relationship between the chapeau, exclusion 6.20, and the content of sub-clauses 6.20.1 and 6.20.2: loss (which can only be by cancellation, and so cancellation) arising directly or indirectly out of, contributed to by, or resulting from a communicable disease or threat or fear of a communicable disease (actual or perceived) which is of a certain nature or character, being that thereafter described: that which leads to quarantine, restriction upon movement or travel advisories and warnings being issued by a national or international body or agency. The sub-clauses provide qualifications by way of content as to the nature or character of the communicable disease by reference to its severity which will enliven the application of the exclusion. The text of exclusion 6.20 does not provide an additional requirement that those restrictions, advisories or warnings emerging from the advent of a serious communicable disease are causative elements of the loss (necessarily the cancellation) in question. It is not open on the text of the exclusion to impose such an ancillary (or indeed, as the applicant submitted, antecedent) causal requirement. It is furthermore not necessary for the restrictions, advisories and warnings specified in the sub-clauses to have force of law. 64 Insofar as the sub-clauses are taken to be descriptive of the nature and severity of the communicable diseases required to enliven the exclusion, it is not clear whether the phrase "leads to" requires the materialisation of such quarantine, restriction, travel advisory or warning prior to the cancellation, whether those restrictions may crystallise subsequent to the cancellation, or whether the mere capacity for the disease to lead to those outcomes is sufficient. It is in any event, for the reasons given below, unnecessary to resolve this question, as quarantine or restrictions upon movement imposed by a national body did indeed materialise prior to the cancellation of the Insured Event in this case. I am, however, inclined to read the clause as requiring the materialisation of the restrictions, imposed by a national or international body or agency, prior to the cancellation. Such a construction avoids potential capricious, inconvenient or unjust consequences in light of the purpose of the Policy: Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; 129 CLR 99 at 109; Major Engineering Pty Ltd v CGU Insurance Ltd [2011] VSCA 226; 35 VR 458 at 470 [45]-[46]. This is consonant with the general tendency to resolve ambiguity in the construction of exclusion clauses in favour of the insured, insofar as the clause permits such a course to be taken: Darlington Futures Ltd v Delco Australia Pty Ltd [1986] HCA 82; 161 CLR 500 at 510; Kyriackou v ACE Insurance Ltd [2013] VSCA 150; 17 ANZ Insurance Cases 61-973 at [89]. 65 Even if the construction propounded by the applicant (and accepted, to a degree, by the respondents in their submissions) were correct, it would not necessarily avail the applicant. It is sufficient that the excluded peril contributed to the loss (that is to the cancellation). This would need to be a material contribution. Even if the exclusion required a causal connection between the quarantine or restriction in movement or travel advisory or warning and the loss (that is cancellation) in question, all that would be required is that the quarantine, or restriction in movement, or travel advisory or warning contributed in a material way to the creation of the conditions which rendered the Insured Event unable to proceed. That this in fact occurred may be drawn from the minutes of the meeting on 24 March 2020 which were so heavily relied upon by the applicant. State border closures and travel restrictions were listed as both a reputational and an operational concern, and the fact that such restrictions would "prevent the event going ahead should they end up being extended" was a consideration which influenced the decision to cancel the Insured Event. 66 The applicant submitted that border closures by States were not by a national body. The word "national" in exclusion 6.20 is, however, in juxtaposition to "international". In the context of an attempted co-ordinated national response to a pandemic with a significant degree of co-ordination among all Governments and the existence of a National Cabinet, imposition of restriction in movement of people within the nation by a constituent Government of the nation satisfies the expression "national body or agency", as distinct from "international body or agency". Further, the minutes referred to "restrictions on gatherings, events, travel, and social distancing" which "would also need to be lifted before the event, to enable the delivery of the event." At least some of these involved restriction in movement of people or travel advisories or warnings that were the product of decisions of National Cabinet (a national body). Such can be seen as directly contributing to the operational fear of a drop out rate of 20% of volunteers (all of whom were to come from around Australia) which "would make it impossible to manage the event." Likewise as to provision of food: the decision minute stating "[w]ith tourists being discouraged to travel to the outback" and other events in the outback being cancelled, no food vans were planning "to make the trip as it is not viable for them to travel …". These were clear material contributing factors in the multi-factorial decision reflected in the minute of the meeting of 24 March 2020. 67 It is unclear from the text of the exclusion whether either or both of the provisions in 6.20.1 and 6.20.2 must be engaged or satisfied. The better view is that either could be satisfied. It does not matter, however, because both were satisfied. 68 The provision identifies a particular type of disease or a disease with a particular character: one of great seriousness; one that leads to the matters in 6.20.1 and 6.20.2, that is the imposition of quarantine or restrictions in movement of people or animals by any national or international body or agency and or any travel advisory or warning being issued by a national or international body or agency. 69 I do not read 6.20.1 and 6.20.2 and the introductory words "which leads to" as a further or narrower causal connection to the loss other than by describing the character of the communicable disease which is the subject of the provision. 70 Thus, the questions is: was the cancellation of the event caused by or contributed to by or did it arise or result from a communicable disease or a fear or threat of a communicable disease? Yes: COVID-19. 71 Did the disease lead to the imposition of quarantine or restrictions in movement of people by any national body or agency? Yes: The Australian Government imposed entry and movement restrictions on persons entering Australia involving isolation and prohibition on entry of people and cruise ships. Also, the States and Territories imposed border and movement restrictions. 72 Did the disease or threat of the disease lead to travel advisory or warnings being issued by any national body or agency? Yes: National Cabinet and State and Territory Governments urged Australians to avoid non-essential travel. This was reiterated by the Prime Minister on behalf of the Australian Government. 73 I consider that National Cabinet, albeit not any formal sub-committee or part of Federal Cabinet, was a national body of the highest character brought together ad hoc comprising of the Prime Minister and the First Ministers of each State and Territory of the Federation. Its advice can be seen as that of a national body dealing with a national emergency. 74 I accept Mr Donovan's evidence that the reasons for the cancellation were as set out in the comprehensive minute of 24 March 2020. 75 The exclusion is engaged because the decision to cancel was taken because of a communicable disease or the threat of a communicable disease of a character contemplated by exclusion 6.20. Taking Mr Donovan's evidence in terms, the event had to be cancelled for the safety of all concerned in the context of the overwhelming operational difficulties thrown up by COVID-19, any number of which was or were sufficient to make holding the event impossible. COVID-19 was a communicable disease of the character contemplated by the provision: It is a disease which leads, and had at the time of the decision led, to the imposition of quarantine and restriction in movement of people by a national body or agency being the Australian Government and State and Territory Governments, and to travel advisories or warnings issued by a national body or agency being National Cabinet and State and Territory Governments. 76 In my view, exclusion 6.20 was engaged. 77 There is no basis for the engagement of s 54 of the Insurance Contracts Act. The acts of third parties being of the Australian Government and the National Cabinet were such as to give a character to the communicable disease in question. They were acts which formed the foundation of the description of the disease and the seriousness of the disease for the operation of the exclusion. The Insurers are not entitled to refuse to pay a claim because of the act of some other person for the purposes of s 54. Rather, a certain character of a disease is met by events that have happened. Likewise, there is no basis upon which to contend that the respondents, in relying upon the exclusion, were failing to act in the utmost good faith: the terms of the exclusion were engaged, it was open to the respondents to rely on it. 78 For the above reasons the application should be dismissed with costs. I certify that the preceding seventy-eight (78) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Chief Justice Allsop.

SCHEDULE OF PARTIES NSD 333 of 2021 Respondents Fourth Respondent: WORLWIDE HOLE 'N' ONE LIMITED INTERNATIONAL AND UK Fifth Respondent: LIBERTY SYNDICATE 4472 AT LLOYD'S Sixth Respondent: ALLIANZ GLOBAL CORPORATE & SPECIALTY SE