Murray Goulburn Co-operative Co. Limited v AIG Australia Limited [2021] FCA 288

Murray Goulburn Co-operative Co. Limited v AIG Australia Limited [2021] FCA 288

The class action claims in respect of units acquired on the secondary market after listing fell within the meaning of 'Securities Claim' under the policy because units in the MGUT are a 'security' representing an equity interest in an 'Insured Entity'. The exclusions in endorsements 7, 8, 10 and 11 and the 'Professional Financial Services' exclusion did not apply to such claims because the policy’s context, language, commercial objective, and structure (including retroactive date and complementary coverage) demonstrated the intention for side C cover to include losses arising from trading units post-listing. Thus, indemnity was available under the policy for the relevant claims.

Parties
First Applicant: Murray Goulburn Co-operative Co. Limited; Second Applicant: MG Responsible Entity Limited; Respondent: AIG Australia Limited
Jurisdiction
Australia
Judgment Date
26 March 2021
Procedural Posture
Commercial and Corporations Insurance / Final Judgment on Claim for Declaratory Relief
Outcome
Declaratory relief granted in favour of the applicants; costs ordered against the respondent.
Legal Topics
Indemnity Insurance, Policy Construction, Class Action Claims, Securities Definition, Exclusion Clauses, Continuous Disclosure Obligations
Insurance Law Corporations Law Commercial Law Indemnity Insurance Policy Construction Class Action Claims Securities Definition Exclusion Clauses +1 more

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Parties

Murray Goulburn Co-operative Co. Limited

First Applicant

MG Responsible Entity Limited

Second Applicant

AIG Australia Limited

Respondent

Procedural Posture

Commercial and Corporations Insurance / Final Judgment on Claim for Declaratory Relief

Legal Issues

  1. 1 Are units in the MG Unit Trust 'Securities' and do the class action claims constitute a 'Securities Claim' under the insurance policy?
  2. 2 Do exclusions in endorsements 7, 8, 10, and 11, or the 'Professional Financial Services' exclusion, apply to secondary market acquisitions of units post-listing?
  3. 3 Is indemnification available under side C cover in respect of settlements paid in the class actions?

Ratio Decidendi

The class action claims in respect of units acquired on the secondary market after listing fell within the meaning of 'Securities Claim' under the policy because units in the MGUT are a 'security' representing an equity interest in an 'Insured Entity'. The exclusions in endorsements 7, 8, 10 and 11 and the 'Professional Financial Services' exclusion did not apply to such claims because the policy’s context, language, commercial objective, and structure (including retroactive date and complementary coverage) demonstrated the intention for side C cover to include losses arising from trading units post-listing. Thus, indemnity was available under the policy for the relevant claims.

Court Disposition

Declaratory relief granted in favour of the applicants; costs ordered against the respondent.

Orders

  • Declaration that on proper construction each of the claims in the class actions satisfies the definition of 'Securities Claim' in the ABC policy.
  • Declaration that endorsements 7, 8, 10 and 11 of the ABC policy do not apply to class action claims relating to secondary market purchases of units in the MG Unit Trust between 3 July 2015 (or 31 August 2015) and 26 April 2016.