The Court of Appeal considered several issues but it was its interpretation of ‘act’ under s54(1) that effectively disposed of the appeal. The court held that living with another person is not an ‘act’, but a ‘state of affairs’ or a ‘description of a relationship’. Here, the facts depended on an inference to be drawn from the conduct of all relevant persons over an extended period of time and did not depend on a single act of a particular person on the relevant day. So they could not amount to an ‘act’ within the meaning of s 54(1).
McClure P also considered two matters of contractual construction.
The policy defined the insured as Linda and Stuart Inglis and ‘you’ or ‘your’ as:
“the person(s) named in the current schedule as the insured and those persons who live with you permanently who are any of the following:
• any member of your own family and your spouse’s or de facto family.”
The Inglises argued that the exclusion relied upon by Allianz did not apply as ‘you’ meant all the insureds and so ‘any person’ had to mean any person other than an insured (including Georgia Inglis).
McLure P rejected the argument. After setting out the relevant principles of contractual construction, her Honour held that the meaning of ‘you’ was informed by its context and the nature or type of the insurance. At its widest, ‘you’ meant all the insureds under the policy severally. However, for the purposes of the relevant insuring clause, the context required that it meant only those insureds who were legally liable to pay compensation in respect of the bodily injury. In the present case, that meant Stuart and James Inglis, not all the insureds, and ‘you’ and ‘your’ had the same meaning in the exclusion. So Georgia Inglis qualified as ‘any person’.
The second issue was whether a contribution claim was a claim which gave rise to a legal liability “for injury” within the meaning of the exclusion. Having regard to the text, context and purpose of the insuring clause and the exclusion, McLure P held that it was.