The High Court has rejected a SunWater appeal application filed after lower courts found insurers were entitled to decline a claim related to Somerset and Wivenhoe dam operations in 2011, when torrential rain in Queensland led to flooding.

“None of the applicant's proposed grounds of appeal enjoys sufficient prospects of success to warrant the grant of special leave to appeal. Special leave to appeal should be refused,” Justices Michelle Gordon and Jayne Jagot say in a decision delivered yesterday.

“We direct the Registrar to draw up, sign and seal an order dismissing the application with costs.”

The case SunWater Limited v Liberty Mutual Insurance involved 15 insurer respondents.

A decision against SunWater was delivered initially in the NSW Supreme Court in 2021. The Court of Appeal upheld that judgment in a unanimous decision handed down in December by Chief Justice Andrew Bell and Justices Robert Macfarlan and Anthony Meagher.

SunWater had lodged a claim after a class action, also involving Queensland state and Seqwater, alleged flooding was exacerbated by the management of water releases from the Somerset and Wivenhoe dams.

SunWater’s liability arose out of a “service level agreement” it had with Seqwater to provide flood management services.

In rejecting SunWater’s claim, insurers relied on an exclusion for liability “arising out of the rendering of, or failure to render professional advice or service for a fee by the insured”.

SunWater had argued it didn’t itself provide the professional services, but was “providing people to provide services” and the service level agreement was “properly characterised…as a labour hire arrangement”.

It also said the insurers’ case would “circumscribe excessively” the cover, and that the exclusion only applied to claims made by the recipient, or intended recipient of the professional advice or service given for a fee, which was Seqwater.

The High Court and NSW Court of Appeal decisions are available here and here.