Selected Seeds Pty Ltd v QBEMM Pty Limited [2010] HCA 37

Selected Seeds Pty Ltd v QBEMM Pty Limited [2010] HCA 37

The appellant's liability was for property damage brought about by the introduction of Summer grass, not by the seeds' failure to fulfil their intended use or function. The Efficacy Clause did not exclude this liability; it applies only where liability arises from a failure to achieve the intended purpose, not from positive harm caused by the product.

Parties
Appellant: Selected Seeds Pty Ltd; Respondents: QBEMM Pty Limited and Ors
Jurisdiction
Australia
Judgment Date
03 November 2010
Procedural Posture
Appeal / High Court of Australia Determination on Appeal From the Supreme Court of Queensland
Outcome
Appeal allowed
Legal Topics
Product Liability Insurance, Exclusion Clause, Indemnity, Construction of Insurance Policy
Insurance Law Product Liability Insurance Exclusion Clause Indemnity Construction of Insurance Policy

Case Brief

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Parties

Selected Seeds Pty Ltd

Appellant

QBEMM Pty Limited and Ors

Respondents

Procedural Posture

Appeal / High Court of Australia Determination on Appeal From the Supreme Court of Queensland

Legal Issues

  1. 1 Whether the Efficacy Clause in the insurance policy excluded liability for property damage caused by contaminated seed
  2. 2 Proper construction of the exclusion clause in the insurance policy

Ratio Decidendi

The appellant's liability was for property damage brought about by the introduction of Summer grass, not by the seeds' failure to fulfil their intended use or function. The Efficacy Clause did not exclude this liability; it applies only where liability arises from a failure to achieve the intended purpose, not from positive harm caused by the product.

Court Disposition

Appeal allowed

Orders

  • Appeal allowed with costs
  • Set aside the order of the Court of Appeal of the Supreme Court of Queensland made on 22 September 2009