A court has dismissed legal action against the Federal Government by a man who was severely injured in a nightclub fight, and whose Solomon Islands-registered insurer did not pay his claim.

Luke Quintano needs full-time care after being shot in the head in December 2002.

He sued the club owner for negligence and won $4 million damages, but the owner went into liquidation and its insurer, unauthorised foreign insurer International Unity Insurance (IUI General), was found to be insolvent.

The Australian Prudential Regulation Authority (APRA) issued a warning to consumers about IUI in 2002 and told the company and its brokers not to accept or renew contracts.

The Australian Securities and Investments Commission (ASIC) had the insurer wound up in 2004, telling the Federal Court IUI and its local agent IUI Australia were insolvent.

IUI had specialised in cover to the prestige motor and hospitality industries.

Mr Quintano was awarded the damages payment in 2009.

But the Federal Full Court says he “has not and will not recover any part of that sum from either the nightclub owner or its insurer”.

In 2011 Mr Quintano asked the federal finance minister to make an “act of grace” payment, citing APRA’s failure to detect and prevent unregulated and/or fraudulent conduct by the insurer, but this was refused.

Act of grace payments are usually a last resort to compensate people in special circumstances, such as when government action or inaction has directly resulted in a loss.

Mr Quintano’s former lawyer told insuranceNEWS.com.au that in 2002 APRA was dealing with the HIH collapse as well as IUI, and this may have contributed to IUI not being shut down until 2004.

An application for a judicial review of the finance minister’s decision was unsuccessful.

Mr Quintano then appealed to the Full Federal Court, but its three judges last week dismissed the case.