The High Court of Australia has refused special leave to the Uniting Church in Australia Property Trust (NSW) (UCPT) to appeal against the decision of the Full Court of the Federal Court in Allianz Australia Insurance Limited v Uniting Church in Australia Property Trust (NSW) [2025] FCAFC 8.
The primary proceedings were brought by UCPT seeking indemnity with regard to historical sexual abuse claims made by former students of Knox Grammar School. Lee J had ordered Allianz to indemnify the UCPT for past and future claims.1 On appeal, the Full Court overturned that decision – finding particularly that UCPT had sufficient knowledge in 2004 of a ‘problem’ to mean that it was then aware of ‘facts that might give rise to’ claims (to use the language of s40(3) of the Insurance Contracts Act 1984 (Cth) (ICA)) that were made years later and its failure to notify Allianz as soon as reasonably practicable after becoming aware of that problem prevented it from using s40(3) as a basis for requiring Allianz to indemnify it with regard to those claims. Our previous article on the Full Court’s decision, including key takeaways for insurers and insureds, can be found here.
The UCPT applied for special leave to appeal. The High Court directed that the application be determined by way of oral hearing held on 17 June 2025.
The UCPT raised two questions of law in its application for special leave:
- whether s40(3) of the ICA is capable of operation over successive policy years if new and different facts become known in a later year which were not known, or capable of being known, in an earlier year; and
- whether s54 of the ICA can be used to cure a failure to exercise a right under s40(3) of the ICA in accordance with the provisions of that subsection.
Gageler CJ, Gordon and Jagot JJ determined that the case was not a suitable vehicle for considering the first question sought to be raised by the UCPT, and that there were insufficient prospects of success on the second question to warrant granting special leave to appeal. The Court consequently refused special leave to appeal with costs.
Key takeaways for insurers and insureds
The High Court’s refusal to grant special leave means:
- Section 40(3) cannot be used over successive policy years to overcome a failure to notify in a previous policy period.
- An insured who fails to notify an insurer of facts that might give rise to a claim as soon as reasonably practicable cannot rely upon section 54 of the ICA to cure its failure to comply with the terms of section 40(3) of the ICA.
- Section 54 will not extend a policy’s cover where there has been non-compliance with a statutory provision, rather than a policy provision.
The special leave application did not raise any issue concerning the Full Court’s decision in relation to exclusion clauses and so the Full Court’s obiter remarks on the impact of section 52 of the ICA on prior known claims and circumstances exclusions remains undisturbed until such time as any future judgment on this issue provides further clarification.
HWL Ebsworth Lawyers acted for Allianz in the first instance decision, in the appeal to the Full Federal Court, and on the UCPT’s application for special leave to appeal in the High Court.
This article was written by Alistair Little, Partner, Natalee Venegas, Senior Associate and Phoebe Cook, Solicitor.
1 Uniting Church in Australia Property Trust (NSW) v Allianz Australia Insurance Limited (Liability Judgment) [2023] FCA 190.
