Federal Court of Australia Allianz Australia Insurance Limited v Uniting Church in Australia Property Trust (NSW) [2025] FCAFC 8 Appeal from: File number: Judgment of: DERRINGTON, COLVIN AND MCEVOY JJ Date of judgment: 7 February 2025 INSURANCE – liability insurance – composite policy held by Uniting Church of Australia covering all entities, persons and associations within it – cover sought in respect of liability to students of Knox Grammar School for sexual abuse by teachers – policies did not extend to cover claims arising from facts and circumstances of which the insured was aware prior to inception – Headmaster and School Council aware of investigator's report identifying sexual abuse of students over many years and culture of paedophilic conduct amongst several teachers prior to inception of policies – whether policies cover subsequent claims made by former students against school INSURANCE – facts and circumstances that might give rise to a claim – report obtained by insured disclose history of repeated sexual abuse of students by a particular teacher and instances of sexual abuse by a number of other teachers – report also identified relatively unchecked culture of paedophilic conduct by teachers and insufficient response when misconduct was detected – subsequent claims made by students against school for sexual abuse by teachers – report disclosed facts in the nature of a "problem", "hornets' nest" or "can of worms" – subsequent claims arose out of facts disclosed by report INSURANCE – attribution of knowledge – composite policy of insurance with severed indemnity – policy in respect of all entities, persons and associations within large church organization – church uses single legal entity as "nominal defendant" to defend claims against any person or entity within organization – nominal defendant made claim on insurer for indemnity of claim made in respect of liability of another church entity – whether other entity's knowledge of prior claims relevant to operation of policy terms or for the purposes of s 40(3) of the Insurance Contracts Act 1984 (Cth) – knowledge of insured whose liability is sought to be indemnified relevant for purposes of policy terms – or knowledge of that insured is attributed to nominal defendant claiming on insurer – claims for indemnity not within cover because claims arose from pre-inception knowledge of facts or circumstances from which claims arose Catchwords: INSURANCE – s 40(3) of the Insurance Contracts Act – whether notification given to insurer of facts which might give rise to claim "as soon as reasonably practicable" after insured aware of them – insured aware of fact or circumstances some years prior to claims being made – investigator's report disclosed relevant problem from which subsequent claims arose – subsequent notification of investigator's report to insurer being too late to trigger extension of cover under s 40(3) INSURANCE – whether clause that limits cover to claims which do not arise from facts or circumstances which were known to insured prior to the policy's inception is void by reason of s 33 of the Insurance Contracts Act – whether any right arose in the insurer to decline indemnity because claim is not within cover – whether, if such right existed, right arose "in respect of a failure by the insured to disclose a matter" – policy clause did not operate in respect of any failure to disclose – whether exclusion clause limiting scope of cover inconsistent with s 52 of the Insurance Contracts Act – clause not inconsistent with either s 33 or s 52 INSURANCE – whether scope of operation of s 40(3) of the Insurance Contract Act extended by operation of s 54 of the Insurance Contracts Act – whether operation of s 40(3) within meaning of "effect of a contract of insurance" as term used in s 54 – s 40(3) not within scope of s 54 because it is does not have effect as a part of the contract of insurance INSURANCE – application of estoppel, waiver, election or breach of duty of good faith – claims in this respect without merit – insufficient evidence adduced of any representation or reliance – no lack of good faith established Acts Interpretation Act 1901 (Cth) Legislation: Insurance Contracts Act 1984 (Cth) ss 13, 21, 22, 27AA, 28, 33, 40, 52, 54 Uniting Church in Australia Act 1977 (NSW) Advance (NSW) Insurance Agencies Pty Ltd v Matthews (1989) 166 CLR 606 All Class Insurance Brokers Pty Ltd (in liquidation) v Chubb Insurance Australia Limited (No 2) [2021] FCA 782 Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788 (2022) 277 CLR 445 Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788 (2021) 287 FCR 388 Anderson v Canaccord Genuity Financial Ltd (2023) 113 NSWLR 151 Antico v Heath Fielding Australia Pty Ltd (1997) 188 CLR 652 Arab Bank plc v Zurich Insurance Co [1999] 1 Lloyd's Rep 262 Australian Competition and Consumer Commission v BlueScope Steel Limited (No 5) [2022] FCA 1475 Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560 Australian Securities and Investments Commission v Westpac Banking Corporation (No 2) (2018) 266 FCR 147 Australian Securities and Investments Commission v Westpac Securities Administration Ltd (2019) 272 FCR 170 Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 Avant Insurance Ltd v Burnie [2021] NSWCA 272 Bilta (UK) Ltd (in liq) v Nazir (No 2) [2016] AC 1 Blatch v Archer (1774) 1 Cowp 63 CA & MEC McInally Nominees Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2009] 2 Qd R 1 CGU Insurance Ltd v AMP Financial Planning Pty Ltd (2007) 235 CLR 1 Clark v Avant Insurance Ltd [2022] NSWCA 175 Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 Commonwealth Bank of Australia v Kojic (2016) 249 FCR 421 Darshn v Avant Insurance Ltd (2021) 154 ACSR 1 DIF III — Global Co-Investment Fund L.P v DIF Capital Partners Limited [2020] NSWCA 124 Director General, Department of Education and Training v MT (2006) 67 NSWLR 237 Einfeld v HIH Casualty and General Insurance Limited (1999) 10 ANZ Insurance Cases ¶61-450 Euro Pools Plc v Royal & Sun Alliance Insurance Plc [2019] Lloyd's Rep IR 595 FAI General Insurance Co Ltd v Australian Hospital Care Pty Ltd (2001) 204 CLR 641 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 Fitzgerald, in the matter of Temp Holdings Pty Ltd (In Liq) v Tully [2024] FCA 391 Fitzpatrick v Job & Job t/as Jobs Engineering (2007) 14 ANZ Insurance Cases ¶61-731 Fox v Percy (2003) 214 CLR 118 GM Global Technology Operations LLC v S.S.S. Auto Parts Pty Ltd [2019] FCA 97 Gosford City Council v GIO General Ltd (2003) 56 NSWLR 542 Cases cited: Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 Guild Insurance Ltd v Hepburn [2014] NSWCA 400 HLB Kidsons (a firm) v Lloyd's Underwriters [2009] Lloyd's Rep IR 178 Johnson v Triple C Furniture & Electrical Pty Ltd [2012] 2 Qd R 337 Jones v Dunkel (1959) 101 CLR 298 Kajima UK Engineering Ltd v Underwriter Insurance Co Ltd [2008] EWHC 83 (TCC) Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705 Lindsay v CIC Insurance Ltd (1989) 16 NSWLR 673 Macquarie Underwriting Pty Ltd v Permanent Custodians Ltd (2007) 240 ALR 519 Major Engineering Pty Ltd v CGU Insurance Ltd (2011) 35 VR 458 Maxwell v Highway Hauliers Pty Ltd (2014) 252 CLR 590 Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500 Moratic Pty Ltd v Gordon (2007) 13 BPR 24,713 MS Amlin Corporate Member Ltd v LU Simon Builders Pty Ltd [2023] FCA 581 Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 471 Newcastle City Council v GIO General Ltd (1997) 191 CLR 85 P & S Kauter Investments Pty Ltd v Arch Underwriting at Lloyds Ltd (2021) 105 NSWLR 110 Pech v Tilgals (1994) 28 ATR 197 Permanent Trustee Australia Limited v FAI General Insurance Company Limited (in liq) (2003) 214 CLR 514 Permanent Trustee Australia v FAI General Insurance Co Ltd (1998) 44 NSWLR 186 Porter v GIO Australia Ltd (2003) 12 ANZ Insurance Cases ¶61-573 R v Commercial Industrial Construction Group Pty Ltd (2006) 14 VR 321 Re FAI General Insurance Company Limited v Fletcher Construction Australia Limited (1998) 10 ANZ Insurance Cases ¶61-403 Rothschild Assurance plc v Collyear [1999] Lloyd's Rep IR 6 South Australian Housing Trust v State Government Insurance Commission (1989) 51 SASR 1 Stolberg v Pearl Assurance Co Ltd [1971] 19 DLR (3d) 343 Tesco Stores Ltd v Brent London Borough Council [1993] 1 WLR 1037 The Commonwealth v Verwayen (1990) 170 CLR 394 The Lady Gwendolen [1965] P 294 Tosich v Tasman Investment Management Limited [2008] FCA 377 Trustees of the Roman Catholic Church for the Archdiocese of Sydney v Ellis (2007) 70 NSWLR 565 Vero Insurance Ltd v Power Technologies Pty Ltd (2007) 14 ANZ Insurance Cases ¶61-745 Weir Services Australia Pty Ltd v AXA Corporate Solutions Assurance (2018) 20 ANZ Insurance Cases ¶62-175 Zurich Australian Insurance Limited v CIMIC Group Limited [2024] NSWCA 229 Division: General Division Registry: New South Wales National Practice Area: Sub-area: Number of paragraphs: 869 Date of hearing: 13 – 16 November 2023 Counsel for the Appellant: Mr JAC Potts SC with Mr JC Conde Solicitor for the Appellant: HWL Ebsworth Lawyers Counsel for the Respondent: Mr DL Williams SC with Mr P Mann and Mr ND Riordan Solicitor for the Respondent: Clayton Utz ORDERS NSD 405 of 2023 BETWEEN: ALLIANZ AUSTRALIA INSURANCE LIMITED ACN 000 122 850 Appellant AND: UNITING CHURCH OF AUSTRALIA PROPERTY TRUST (NSW) Respondent order made by: DERRINGTON, COLVIN AND MCEVOY JJ DATE OF ORDER: 7 february 2025 THE COURT ORDERS THAT: 1. The appeal be allowed. 2. Paragraphs 3 – 21 of the declarations and orders made by the primary judge on 12 April 2023 in NSD 1144 of 2019 be set aside and, in their place, it be ordered that the proceedings otherwise be dismissed. 3. The respondent pay the appellant's costs of the appeal. 4. The parties are to be heard on the question of costs before the primary judge. 5. The appellant is to file any material and submissions (limited to 5 pages) on which it relies on the question of costs before the primary judge within 14 days from the date of these orders. 6. The respondent is to file any material and submissions (limited to 5 pages) on which it relies on the question of costs before the primary judge within 21 days from the date of these orders. 7. The appellant is to file any material and submissions in reply (limited to 3 pages) within 28 days from the date of these orders. 8. Subject to further order, the question of costs before the primary judge be determined on the papers. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT DERRINGTON J: Introduction The nature of the appeal 1. The circumstances behind, and the arguments associated with, this appeal are of such a nature that it is desirable to provide a preliminary and fulsome introduction that will, unfortunately, result in some repetition in the explanation of the reasons for the decision. Nevertheless, it is the best approach. 2. Between 31 March 1999 and 31 March 2011, Allianz Australia Insurance Limited (Allianz) (or its predecessor, Mercantile Mutual Insurance (MMI)) issued successive policies of insurance to the Uniting Church in Australia (UCA). The UCA is not itself a legal entity, but an amalgam of a variety of numerous groups, associations, synods, assemblies, committees, councils, bodies corporate and individuals, all of which were individually covered by the policies. Amongst the bodies corporate are statutorily incorporated trusts referred to as "Property Trusts" which, for their respective geographical areas, own or hold the UCA's property. For present purposes, they included the Uniting Church in Australia Property Trust (NSW) (UCPT), which is the respondent to the appeal. 3. Knox Grammar School (Knox) is a school within the umbrella of the UCA and, specifically, within the Synod of New South Wales. Those who were responsible for the school's management, operation and administration, being the members of the School Council and the successive Headmasters, were also within the scope of the expression, "Insureds", in the successive policies. 4. From about 2007, civil claims in respect of historical sexual and physical abuse were brought by numerous former Knox students or by the parents of former students. Though having no discernible part in the management, administration or operation of Knox, the UCPT responded to those claims, engaged in settlement negotiations, and resolved a number of them. It made substantial payments for those settlements and, consequently, sought indemnity from Allianz under the policies. Initially, Allianz accepted that its policies responded to the UCPT's losses and, over time, it paid substantial sums by way of indemnification. Subsequently, it determined that, in the events which had occurred, the liability for claims arising from the sexual abuse of boys at Knox was not entitled to indemnity under its policies. It had concluded that, prior to the inception of the policies, the relevant insureds were aware of the facts or circumstances from which the claims arose with the consequence that they were beyond the policies' cover. It further asserted that no notice of those facts or circumstances had been given during any policy period with the result being that s 40(3) of the Insurance Contracts Act 1984 (Cth) (ICA) did not operate to extend cover to subsequently made claims. In particular, it contended that, on or about 1 May 2013, it discovered, for the first time, the extent of the prior awareness on the part of the relevant insureds of facts likely to give rise to the sexual abuse claims. It therefore declined all further requests for indemnity. It has not sought, and does not seek, to recover the amounts which it has previously paid though, on its case, it had no obligation to pay them. 5. Central to the appeal is one of two investigative reports prepared by Mr Grahame Wilson, a licensed private investigator with LKA Risk Services Pty Ltd, into the possible sexual abuse of boys at Knox by a teacher, Mr Adrian Nisbett. Mr Wilson had a long employment history in educational institutions, following which he had held a government position as the director of child protection investigation, where he led a team of investigators. He clearly had expertise in the area of investigating the sexual abuse of children. 6. On 7 May 2004, he provided a report (LKA2) to the then Headmaster of Knox, Mr John Weeks. It was detailed, extensive and addressed matters that had been raised following an initial investigation undertaken by him late in the previous year, also in respect of allegations made against Mr Nisbett. Following the receipt of the initial report (LKA1) from this first investigation, Mr Weeks became aware of additional allegations relating to Mr Nisbett's conduct in and from 1986. As a result, Mr Wilson was engaged to investigate those additional allegations. 7. It will be necessary, in due course, to refer extensively to the content of LKA2 and what it would have revealed to a reasonable reader in Mr Weeks' position at the time. It is accepted by the UCPT that it was read by Mr Weeks in full at the time it was received. At this stage, it is sufficient to observe that it contained references to alleged incidents of inappropriate behaviour of a sexual nature towards students at Knox by Mr Nisbett as well as by a number of other teachers. It also contains information about the extent to which a former Headmaster of Knox had been aware of allegations of that type of conduct. 8. In brief, Allianz contends that on receipt of LKA2, the relevant insureds under the policies became aware of the facts from which the claims subsequently made against the school by former students could reasonably be said to have arisen. It says that none of the insureds under the policies took the opportunity provided by s 40(3) of the ICA to give it notice of LKA2 or its content to Allianz, which would have extended cover under the relevant extant policy to the claims which were subsequently made. It further contends that the former students' claims are not within the scope of later policies because those insureds were aware of facts or circumstances which may have given rise to those claims. 9. In the proceedings below, the UCPT sought orders that it was entitled to indemnity under several of the successive policies in respect of amounts which it has paid by way of settlement of claims, and declarations that it was covered under the later policies for claims by others who had been identified as potential claimants. 10. These claims were substantially upheld. The primary judge granted declarations to the effect that Allianz is required to indemnify the UCPT for the claims arising from sexual or physical assault by former teachers of Knox. Their breadth reflects the range of the primary judge's findings as to the notification of claims by the UCPT. 11. Allianz now appeals the primary judge's orders and declarations. In addition to opposing the appeal, the UCPT contends, by a notice of contention, that the reasoning of the primary judge should be upheld on several additional grounds. A need for confidentiality 1. In order to maintain a degree of confidentiality for the victims of the sexual abuse, certain anonymising cyphers were used before the primary judge. Those who had made claims were identified by using the abbreviation "TPC" (third-party claimant), and those who had been identified as potential claimants were identified using the abbreviation "PTPC" (potential third-party claimant). Some of the staff members of Knox who were alleged to be perpetrators of the abuse were identified using the abbreviation "AP" (alleged perpetrator). The same terminology is adopted in these reasons, noting that in some respects the confidentiality orders relevant to the appeal are not as broad as those of the primary judge. The evidence before the primary judge and on appeal 1. The trial was conducted by reference to agreed documents and a statement of agreed facts. No witness gave evidence at the hearing. The reason for that was not made clear on appeal, though as many of the factual issues occurred between 15 and 20 years ago, it may be that the relevant witnesses were no longer able to give evidence or were unable to recall the circumstances satisfactorily. As matters transpired, several important contestable facts arose, and their resolution can be achieved only by drawing inferences from the documents in the voluminous record. In this respect, there being no question of the credibility of witnesses, this Court is in the same position as the primary judge to assess the value of the documentary evidence and to draw inferences. Nevertheless, as these reasons disclose, the available documentary evidence is far from complete and, in some instances, attempts to draw inferences from the smattering of facts revealed by the tendered documents can descend into little more than impermissible guesswork. This is particularly true in relation to identifying the functions and relationships of the many different relevant entities, associations, and persons within the UCA. A central issue in the appeal 1. As the appeal progressed over four days of hearing, one matter of prominence was the precise nature of the UCPT's position as both the respondent to the claims brought by the former students and as the claimed insured under the policies. It has been the defendant in many of the proceedings brought by former pupils and, as mentioned, it has engaged in those actions, has negotiated the settlement of many, and has paid the amounts of the settlements. Given those facts, it might come as a surprise that the effect of its submissions was that it had no involvement whatsoever in the school's management, operation or administration, that those who did were not its agents, and that their knowledge was not attributable to it. Ultimately, on that basis, there was no legally logical basis on which it was liable to the former students for the harm inflicted upon them. It would have owed them no relevant duty, either directly or indirectly, whilst they attended Knox. Conversely, those who were liable to the students were the members of the School Council at the relevant times, and perhaps the school's Headmasters. More broadly, the liability might have extended to the members of the Synod, though that is far from certain. In any event, for the purposes of any claim or litigation, the UCPT was presented by the UCA as the entity which was presumptively liable in respect of the claims, and it acted as the relevant defendant in the several proceedings. Its use as a form of "nominal defendant" in this fashion was permitted under the UCA's constitution, even though the question of whether that would bind third parties is debateable, to say the least. 2. There may well have been many practical reasons for UCPT's acceptance of the role of the relevant defendant in any claim by a former student, not in the least being that it would prevent the individual members of the School Council and the Headmasters from being directly exposed to litigation, and that the UCPT had the financial capacity to meet any liabilities so incurred. It appears that, whilst it was still prepared to cover the claims, Allianz accepted these arrangements for the purposes of dealing with them as they were made. From its perspective, the UCPT, the School Council and its members, as well as the relevant Headmasters, were all insureds under the policies, such that the identity of the defendant in any litigation was inconsequential. But this convenient fiction for that purpose cannot fix the facts in ways they are not in order to use the fiction for a different purpose entirely, that is, to render the UCPT the covered party for a liability it did not have in order to determine the issue of the insured's pre-inception knowledge of facts which might give rise to a claim. 3. The issue presently under consideration is Allianz's obligation to indemnify in respect of the third parties' claims and, specifically, whether that obligation is avoided by reason of the awareness, prior to the relevant policies' inception, of the relevant insured entities of the facts or circumstances which gave rise to the claims. At this point, the use of the UCPT as the nominal defendant in respect of the liability of one or more other persons within the UCA, and as the putative insured, becomes rather more than problematic. In order to succeed, the UCPT must establish that it was the insured that was liable in respect of a claim to which the cover applied. 4. Ultimately, its position was effectively as follows. Although neither it nor its servants or agents had any involvement in the management, administration, and operation of Knox, by the UCA's constitution, it was entitled to substitute itself as the relevant defendant in order to be sued by anyone affected by a maladministration at the school. It further says that it was similarly entitled to claim under the policies of insurance in respect of the liability of those who were responsible for any harm caused. 5. In that latter respect, however, it further asserted that, because neither it nor its privies were aware of facts or circumstances of that maladministration which might adversely impact the policy coverage in respect of these claims, its entitlement to indemnification is unaffected. Specifically, it says that its rights are untainted by the pre-inception knowledge of those who were involved in the school's management, administration, and operation, and who were responsible for the liabilities which arose. 6. The effect of this is that, even if the members of the School Council and the Headmasters would be precluded, by reason of their prior knowledge, from obtaining indemnity in respect of their liability for the claims, the UCPT is entitled to indemnity in respect of that same liability if it assumed responsibility for it. 7. It is apt to observe that this articulation of the UCPT's position does not reflect the form of its submissions, but it is an accurate characterisation of their substance and effect. The primary judge's reasons Overview 1. It is necessary to set out in some detail the substance of the primary judge's reasons. In doing so it is relevant to note that the issues on appeal, whilst derived from those which were debated at first instance, were advanced with substantially different emphasis. Issues, which before the primary judge attracted relatively little attention by the parties, became the subject of greater focus on appeal. For instance, before this Court, substantial reliance was placed on the Headmaster of Knox's receiving LKA2 on or about 7 May 2004, and its being tabled at a School Council meeting on 16 June 2004. Indeed, the Court was addressed at considerable length as to the contents of LKA2, which articulated the existence of paedophilic activity on the part of certain teachers at Knox over an extended period. 2. In the first paragraph of the primary judge's reasons, the UCPT is identified as "the insured" in respect of claims relating to historical sex abuse at Knox. Of a fashion, that statement was not incorrect. However, as has been touched upon above, and as these reasons will demonstrate, its status as the insured for the indemnification in respect of these claims was artificial. Although being covered as an insured in respect of its liability under the 12 successive policies granted by Allianz, it was but one of the numerous legal entities and individuals within the scope of the UCA's vast operations to whom cover was generally provided. Moreover, whilst under the UCA's constitution, it was permitted to act as the defendant in litigation touching the Church or any agency of the Church. Absent the agreement between it and other parties, it had no legal liability for the sexual abuse of students at Knox. 3. During the appeal, the UCPT's counsel asserted that it was its assumption of responsibility for the liability of other entities within the UCA which rendered it liable for the claims of Knox's former students. Whilst the UCPT may have put itself forward to any potential claimants that it would stand as the proper defendant in any proceedings, that did not automatically mean that it was liable for the purposes of its own cover under the policies of insurance. On the contrary, if it had assumed responsibility for the liability of other entities within the UCA organisation, any claim it made on Allianz for indemnity would be in respect of the liability of those other entities and subject to the same limitations that affected the insureds who were, in fact, liable. That distinction was not adequately maintained before the primary judge, even though it is pivotal to the central issue in the appeal. The substantive reasons of the primary judge 1. It is not necessary to address all the findings and considerations in the learned primary judge's extensive and articulate reasons for judgment, as many are not relevant to the issues on appeal. Nevertheless, the inclusion of some brief consideration of them is appropriate. 2. In his exegesis setting out the background of the matter, including the structure of the UCA, his Honour addressed the nature of the UCPT. At [27], in relation to the several property trusts within the UCA, he observed that there was one in most states and territories. He said that: 27 Importantly, the property trusts are the legal entities to sue, or be sued on behalf of, the Synods or any agency of the UCA, or in relation to trust property. 1. That conclusion is, with respect, correct so far as it goes, but it is not the complete picture since the UCA's constitution does not alter the rights of third parties. In any case in which a third party suffered injury at the hands of any of the UCA's agencies, they may commence proceedings against the entities or persons responsible for their loss. Such persons are not bound by the UCA's constitution to sue the UCPT. In addition, a third party who is sued by the UCPT in respect of a claim vested in one of the Church's other entities may validly assert that no claim is maintainable against them. They are also not bound by the terms of the agreements between the members of the Church. 2. In Section B.4 of his reasons, the primary judge assayed at length the investigations which occurred from 2003 consequent upon an allegation having been made against Mr Nisbett, who was then a long serving master at the school. As has been mentioned above, though the initial investigative report, LKA1, identified some questionable behaviour by him in relation to a student, it concluded that no relevant offence had been detected; but a further report (LKA2) was commissioned into his conduct. His Honour outlined the course of that second investigation, the delivery of the report, the further allegations made against other teachers at the school, and the subsequent arrest of a number of them. Over time, many were charged with multiple offences in relation to sexual abuse of students at the school. 3. In 2006, significant claims against Knox began to emerge, and his Honour identified the occasions on which subsequent notification of claims or potential claims were given by the UCA to Allianz. From that followed his consideration of the actions commenced against Knox and the manner in which they were handled by Ms Wendy Blacker of the legal firm, Gadens, which acted on behalf of both Allianz and the UCA in respect of those actions. Her role became significant to his Honour's conclusions. 4. Although he concluded (at [152]) that on 7 March 2007, Gadens was retained on behalf of Allianz and the UCPT, it appears that it was initially instructed to act on behalf of Allianz and "The Uniting Church in Australia". It was not until 19 June 2007 that the UCPT was identified in the evidence as being the relevant insured for the purposes of the claims. There is, however, no evidence as to why it was substituted as the recognised insured. On the material then available to the insurer, the identity of which of the group of insureds was appropriately covered was inconsequential. 5. His Honour then considered Allianz's agreement to indemnify in respect of several claims by third parties, followed by its subsequent declinature which occurred at or around the time that the UCPT sought to provide further details of potential claims in relation to historic sex abuse of students at the school for the purposes of s 40(3) of the ICA (which, henceforth, will simply be referred to as "s 40(3)"). 6. His Honour then considered the factual and legal issues arising for determination. The first was the timing of any engagement of s 40(3) to the policies. The issue concerned the occasion on which the UCPT gave to Allianz notice of the issues arising from LKA2. Relevantly, his Honour concluded that the solicitor, Ms Blacker, was Allianz's agent for receiving notification of facts which might give rise to claims, that she received LKA2 in April 2007, and that this constituted sufficient notice to Allianz of the report and of its contents for the purposes of s 40(3). At the very least, at around that time she gave advice to Allianz which made some, although not detailed, mention of LKA2. 7. His Honour also concluded that, despite the contents of LKA2, the facts in it did not become significant until the first complainant, TPC1, altered the substance of his allegations in 2006 to include a claim that he had been sexually abused by Mr Nisbett. From the correspondence passing between the parties in early 2007, his Honour (at [401]) found that the existence of LKA2 and its content about Mr Nisbett's sexually assaulting multiple students was effectively notified to Allianz. He had earlier concluded (at [391]) that when TPC1 made a complaint of sexual assault by Mr Nisbett in December 2006, LKA2 took on a different hue, with the result that, despite Knox having received the report in June 2004, it became relevant only subsequently, so that it and its contents were notified to Allianz "as soon as reasonably practicable" after the insured became aware of it for the purposes of s 40(3). 8. In this analysis, it is noticeable that the primary judge appeared to be concerned (at [395] – [398]) with the knowledge of Mr John Oldmeadow who was the Executive Director of the Board of Education of the UCA NSW Synod at the time and acting in that capacity. However, it is not immediately apparent why Mr Oldmeadow's knowledge was relevant to any particular issue. He was not identified as a person whose knowledge was attributable to any of the particular insureds for the purposes of the operation of the policies. 9. His Honour also referred (at [396]) to a Mr Scott Driscoll as a person who was from the UCPT, though the source of that conclusion is not stated. A submission to that effect appears in the UCPT's submissions at trial, but evidence on that issue is absent. In the course of the appeal, Mr Driscoll was identified by Mr Williams SC, counsel for the UCPT, as a member of "Uniting Resources" which was a non-legal entity that was separate and distinct from the UCPT. The material also reveals that Mr Driscoll was, at some time, the insurance manager for the NSW Synod. Ultimately, however, there was no submission that his knowledge was relevant to any issue. 10. Otherwise, his Honour held that LKA2 was shown to Ms Blacker on 10 April 2007, for the purposes of allowing her to prepare an advice on liability and quantum in relation to TPC1's claim. Her first letter of advice was sent in June 2007, though it was finalised only in November of that year. His Honour held (at [428]) that by that time, the events which followed the making of a formal claim by TPC1, "placed the historical information in the 2004 LKA Reports and Materials in a different light", and that the information contained in it, in the context of the events which had happened, revealed the existence of a "problem" concerning Mr Nisbett's conduct that was inherently likely to give rise to further claims. He concluded (at [430]) that this "problem" was notified to Allianz by Ms Blacker's letters of advice in June and November 2007. 11. Though his finding that Ms Blacker was Allianz's agent for receiving notification of facts for the purposes of s 40(3) was not challenged on appeal, there is some tension between it and the conclusions reached in relation to the notification issue. If Ms Blacker was the agent to receive notification of facts, the notification to Allianz of LKA2 must be when the facts were revealed to her, rather than when she subsequently notified them to Allianz. 12. In his reasons, his Honour held that a "concatenation of events" followed from TPC1's formal claim of sexual assault and that coloured the substance of LKA2, though that appeared to have occurred by the time that LKA2 was inspected by Ms Blacker in April 2007. 13. On his Honour's approach, no further unification of facts was necessary to activate the revelatory quality of LKA2 such that the "problem" identified in it was revealed in the 2007/2008 policy period, and all subsequent relevant claims involving Mr Nisbett would be indemnified under that policy. The consequence was that whatever relevant problems were revealed by LKA2, the notice of them given in June 2007 to Allianz was as soon as reasonably practicable, despite the report having been received by the school in 2004. 14. His Honour subsequently addressed (at [444]) the issue of certain "bulk notifications" which were made by the UCPT from about March 2009. They sought to give notice of the possibility of claims against the school in relation to a large number of former students. A submission had been made that they were ineffective because the "problem" of the allegations of sexual abuse by teachers at the school had been known to the insured since the receipt of LKA2 in 2004. That was rejected for a number of reasons, including those referred to above. 15. The first was that the foundation for making the bulk notification had not arisen until the circumstances had developed in which a number of the alleged perpetrators had been arrested, and media reports of those events and the possible crimes committed had occurred. It was held (at [455]) that the notifications concerned "allegations of historical sexual abuse against multiple former students by multiple former teachers of [Knox]", which "were of a character which, objectively understood, might give rise to claims for psychiatric injury and/or physical injury arising from physical assault, sexual assault, trespass to person, breach of fiduciary duty and negligence"; and that those matters, apparently, were not matters that the earlier known facts had revealed. His Honour also accepted (at [456]) the UCPT's submission that, in the circumstances, the description of the likely claimants was sufficiently clear for the purposes of a notice under s 40(3), and the relevant class of potential claimants was described by reference to their characteristic of being former students of Knox. It was also held (at [459]) that the UCPT was not aware of the "problem" until the end of 2006, because the relevant facts had not come to the attention of Mr Oldmeadow until about that time or shortly afterwards. That interpretation of his Honour's reasoning is reached by a consideration of his Honour's reference (at [459]) to the reasons earlier set out at [391] to [401]. However, again, there was no evidence of why Mr Oldmeadow's knowledge was attributable to the UCPT. 16. The second reason for upholding the validity of the bulk notifications was that the content of LKA2 when received in 2004 gave rise to only a "bare possibility" of a claim because, as at that time, no substantive complaint had been made. His Honour held that by itself, LKA2 did not reveal facts which might give rise to a claim. 17. These conclusions were important in the context of the appeal and give rise to two questions: 18. First, was the relevant insured aware of LKA2 and its contents in 2004? 19. Secondly, did LKA2 by itself disclose the existence of a "problem" of the sexual abuse of multiple boys at Knox by a number of teachers? As will be seen, Allianz's contention on the appeal is that both questions should have been answered in the affirmative. 1. In the result, his Honour held (at [464]) that for the purposes of s 40(3) in March 2009, the purported bulk notifications were efficacious to extend the operation of the policy, during the currency of which the notifications were made, to cover subsequent claims which arose from the facts and circumstances notified. 2. He then considered (at [456] – [489]) further notifications which were subsequently made in relation to a number of other teachers from the school, and a subsequent bulk notification on 31 March 2010. These become relevant in relation to the ascribing of any claims to particular policies on the assumption that it remained open to the UCPT to give notice of relevant facts in order to obtain the benefit of the extension of cover provided by s 40(3). 3. From [558] onwards, his Honour addressed the issue of the disputed operation of, inter alia, exclusion clause 7 of the policies which excluded cover in respect of known prior circumstances (Exclusion 7). In the first instance, he held that the operation of Exclusion 7 was not affected by either s 33 or s 52 of the ICA. He then addressed the question of whether the UCPT had relevant knowledge of matters or occurrences which might give rise to a claim. 4. At [600] of his reasons, he noted that Allianz had submitted that the UCPT claimed as the insured in relation to the liabilities arising from the claims made against the school by former pupils. It relied on the facts that the UCPT was the owner of all of the property including the ABN for the school, held the business name of "Knox Grammar School", had accepted responsibility for the liability of the wrongs committed by the teachers at the school and had satisfied all claims and potential claims against Knox, and had given discovery of the school's documents. In this context, his Honour set out part of the submissions made by Mr Potts SC on behalf of Allianz on this issue. They are referred to later in these reasons, but it is noted that specific reference was made to the UCPT's suing Allianz "for indemnity for liabilities incurred by Knox Grammar School in operating as a school". As it is concluded on this appeal, that was an accurate description of the UCPT's claim as against Allianz. 5. On this issue, his Honour observed (at [601]) that the difficulty with Allianz's submission was that the policy was a composite one which provides cover to multiple insureds who do not carry on their own business "including, among others, 'voluntary workers', 'committee members', 'counsellors'". He added the following at [604]: 604 In any event, as noted earlier in these reasons (at [35]), cl 4.9.1 of the Assembly Regulations provides that the UCPT is the proper defendant in any action against the UCA or its institutions. It would be within the UCPT's own business to meet claims that it was directed to meet by the Synod in respect of any litigated matter involving the UCA or its various institutions. I am unable to see how any rule of attribution could justify, on that basis and in the context of relations with its insurer, the knowledge or awareness of representatives of KGS being imputed to the UCPT. 1. For the reasons which appear later, these conclusions should not be accepted. However, it should be immediately observed that the submissions made to his Honour on this issue were neither as refined nor developed as they were when made on the appeal. That is said without criticism of counsel: it is merely the natural consequence of the process of distillation which occurs through the trial process and the primary judge's analysis and consideration. It is necessary only to observe that, as in the present circumstances, when one insured (A) interposes itself to assume responsibility for another insured's (B's) liability to a third party, and then seeks indemnity under the policy which covers them both, to the extent to which that is even possible, A must necessarily also assume or ensure the performance of B's obligations and liabilities to both the third-party claimant and the insurer. It is inconceivable that A could successfully deny liability to the third party on the basis that it owed no duty to them, and it would be equally incongruous for it to claim that its right to indemnity, if any, was not subject to B's obligations vis-à-vis the insurer. 2. The matter progressed before the primary judge with a focus on whether the UCPT had actual or constructive notice of the facts which might have given rise to a claim, rather than whether it was necessarily fixed with the knowledge of the insured (liable at the time to the claimant) in whose stead it sought indemnification. Nevertheless, the primary judge rejected a submission that the UCPT had admitted that the knowledge of Knox was attributable to it. That submission had relied upon the UCPT's statements in the defences which it had filed in several actions commenced by former pupils, wherein it had admitted that it owed "a duty of care to the students attending [Knox], including the plaintiff, to take reasonable care to protect the students against foreseeable risk of injury while the students, including the plaintiff, were on [Knox]'s premises during the hours when [Knox] was open for attendance". Allianz also submitted that the UCPT had admitted in paragraph 5(c) of a relevant defence that the Knox Headmaster "was responsible for implementing policy and the day to day management of the first defendant". Other alleged admissions were to the effect that the UCPT was vicariously liable for the acts and omissions of the Headmaster of Knox and the staff in the course of their employment. A paragraph in the UCPT's defence to the claim brought by TPC12 had stated: For the purpose of this Defence only, insofar as there is any finding of liability on the part of the School as a result of the School's acts or omissions, or the acts or omissions of others that the School is found vicariously liable for, the first defendant admits that such liability rests with the first defendant. 1. The primary judge (at [609] – [610]) rejected the above as constituting admissions by the UCPT as to the truth of the statements on the ground that they were made in a pleading and that they were issues of law. There is difficulty with that conclusion as is discussed below. For present purposes it needs to be observed only that the UCPT's statements in its defences as to its responsibility for the conduct of the school, the Headmaster or others, were fundamental to its assumption of their liability for the third-party claims and to its claims for indemnity under the policies. Indeed, it is improbable that it might attract the liability for other entities in the UCA organisation by admitting its responsibility for their liability in respect of their breaches of duties owed to the third parties, but then deny such connections or responsibilities when seeking indemnification from the insurer for that liability. 2. His Honour also rejected (at [611] – [664]) the submission that the evidence revealed that the UCPT received LKA2 much earlier than 2007 and, perhaps as early as June 2004. This necessitated a factual inquiry into the events which had occurred over an extended period of time. The substance of Allianz's submissions was that, given the gravity of the contents of LKA2 and the rigorous reporting procedures which the UCA had in place, including the occurrence of regular "insurance sweeps", as well as the history at the school where the need for reporting of sexual abuse was emphasised, it could be inferred that the school's Headmaster would have notified the relevant persons in the UCA of LKA2. The identity of the relevant recipient of information for the purposes of dealings with the insurer, was unclear. It may have been Mr Steve Piening, the UCA's Insurance Manager, or the General Secretary of the Synod, whomever that may have been. This was ultimately rejected on the basis that, in 2009, Mr Dwane Feehely who was a member of the Property and Finance Board (also called "Uniting Resources") and who had replaced Mr Piening, indicated that he had not then seen a copy of LKA2 and that one should be obtained. His Honour also relied on Mr Oldmeadow's assertion that he had not, as at that time, seen the report. His Honour concluded that only Ms Blacker had seen it in 2007, and that Mr Oldmeadow and others from the UCA had not seen it until sometime later in 2009. 3. In relation to the question of the possible attribution to the UCPT of the knowledge held by the entities in the UCA agencies, his Honour observed the following at [667]: 667 From both a functional and structural perspective, having regard to that overview, it is tolerably clear that Uniting Resources was (and remains) the entity within the UCA with immediate responsibility for the obtaining of insurance on behalf of the UCA. The Uniting Resources Board is ultimately accountable to, and subject to the oversight of, the Synod: see UCA Constitution, cl 32. The general secretary of the Synod acts, in substance, as the chief executive officer of the Synod and each of the executive directors of the Boards is accountable to the general secretary: see Synod by-laws, cl N3.24.3. The Synod, in turn, is accountable only to the Assembly: UCA Constitution, cll 31, 32 and 38. None of the UCA, Assembly, the Synod, KGS or the KGS council is a legal entity having a separate legal personality. 1. It is relevant that, like the others referred to in that paragraph, Uniting Resources is also not a legal entity. It was merely a board of members which had designated responsibilities, though the identities of its constituent members from time-to-time were unclear. Further, it did not seem to be any part of either parties' case that the knowledge of Uniting Resources was operatively relevant to the UCPT's rights and obligations under the policy. 2. At [669] to [670], his Honour found that the description of the insured, as it appeared in the quotation slips and underwriting submissions, as well as the structure of the UCA and the relationship between the various insureds, was well known to Allianz when it accepted the risk on terms which included Condition 1 (a clause concerning the notification of claims). That structure reflected a delineation between the UCA and the UCPT on the one hand, and Knox on the other, which was reflected in the way in which Allianz, the UCA, the UCPT and Knox conducted themselves during the relevant period. 3. From this, it is apparent that his Honour considered that Knox and the UCPT were separate entities and, as his Honour stated (at [671]), there was nothing in the constituent instruments by which the entities were administered that deemed the knowledge or awareness of one to be that of another. It followed, so his Honour found (at [672]), that there was no relevant attribution of knowledge and no relationship of principal and agent operating such that the knowledge of persons at Knox could be the knowledge of the UCPT. From that conclusion, it might be thought that it was the UCPT's knowledge that was relevant to the operation of s 40(3) or Exclusion 7 in relation to the claims for indemnity. If that were so, however, it is unfortunate that the identity of the guiding mind and will of the UCPT was not revealed. In a case which, on one view, turns on the knowledge of the UCPT at particular times, it is more than unusual that there was no evidence of the individuals whose knowledge was that of the UCPT, or could be attributed to it. That seemed to be a consequence of the manner in which the matter was argued before the primary judge. 4. In Section G of his reasons, his Honour considered the issues of estoppel, waiver, election and utmost good faith, though they were rendered moot by his earlier conclusions. In relation to these, he addressed the issues which arose from the then recent decision in Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788 (2022) 277 CLR 445 (Allianz v Delor Vue), which had considered each of those doctrines. He concluded (at [688] – [691]) that the effect of that decision was that the relevant matter to be addressed in the case before him was estoppel, and that an essential requirement for the successful invocation of an estoppel was the identification of relevant detriment. However, in the circumstances, his Honour determined (at [692]) not to make any findings on that issue. 5. Finally, his Honour indicated that he would make declarations in accordance with his reasons after the parties had an opportunity to make further submissions. The primary judge's orders 1. Subsequently, on 12 April 2023, his Honour made declarations to the effect that the UCPT was entitled to indemnity in respect of certain claims or potential claims under certain specified policies. 2. The first set of declarations related to notification of the claim made by PTPC1, concerning the sexual abuse of him and other boys in the 1970s. They are not the subject of any appeal and the possibility of that claim being made was held to have been notified during the 1999/2000 policy. 3. The second group of declarations related to the claims made by TPC1 against Mr Nisbett. His Honour declared that notice in relation to that claim was given during the 2003/2004 policy and that Allianz was liable to indemnify the UCPT in respect of TPC1's claim. 4. In relation to claims by other students who alleged sexual abuse by Mr Nisbett, it was declared that notice was given for the purposes of s 40(3) during the 2007/2008 policy which was as soon as reasonably practicable after the UCPT became aware of them, and, as a consequence, Allianz was required to indemnify in respect of those claims, being ones made by TPC2, TPC7, TPC8, TPC9, TPC10, TPC12, TPC14, TPC20, TPC23, TPC27, TPC32, TPC34, TPC35, TPC36, TPC41, TPC45, TPC48, TPC50, TPC51 and TPC53. 5. His Honour also declared that the notification by the UCPT in 2007 covered any future claim against it by any former student in respect of loss suffered by reason of sexual misconduct of Mr Nisbett. It was further declared that Allianz was required to indemnify it in relation to any such claim made. 6. The declarations made in paragraphs 9 to 12 of his Honour's orders were in respect of claims against the UCPT made by persons who were the victims of sexual abuse by two teachers, Mr Craig Treloar and Mr Barrie Stewart. The specifically identified claimants were TPC4, TPC5, TPC6, TPC11, TPC13, TPC15, TPC16, TPC17, TPC18, TPC19, TPC21, TPC24, TPC25, TPC26, TPC28, TPC30, TPC37, TPC38, TPC39, TPC40, TPC43, TPC44, TPC47, TPC49 and TPC52. The declarations included as yet unmade claims by others who were abused by those teachers. Allianz was found to have been notified of such claims during the 2008/2009 policy periods by correspondence and bulk notifications and was liable to indemnify in respect of all such claims. 7. The declarations made in paragraphs 13 to 16 deal similarly with claims arising from the conduct of Mr Damien Vance, Mr Roger James, Mr Bruce Barratt and other alleged perpetrators, of which there were 15 in total. 8. The primary judge made further declarations as to the efficacy of certain bulk notifications made by the UCPT. He also made certain negative declarations to the effect that Allianz was not entitled to decline to indemnify the UCPT in reliance on, inter alia, Exclusion 7 or the contents of LKA1 or LKA2. The grounds of appeal and relevant issues 1. Six grounds appear in the notice of appeal. The first is to the effect that the primary judge erred in failing to conclude that LKA2 contained facts and circumstances likely to give rise to a claim, and from which the claims for which indemnity was sought arose. 2. The second is that his Honour erred in failing to find that the UCPT became aware of LKA2 only by on or about March 2009, and, further erred by failing to find that it knew of it in 2004 or 2006, on the basis that the knowledge of Knox was the knowledge of the UCPT, and the former was aware of the report when it was delivered, or on the basis that the UCPT independently became aware of LKA2 in those time frames. 3. A consequential ground is that his Honour failed to find that the UCPT had not notified Allianz of the matters revealed by LKA2 as soon as reasonably practicable after it became aware of them within the meaning of s 40(3), with the result that the notifications which were made were ineffective. 4. The fourth ground asserts that the primary judge erred in failing to find that the UCPT's claims were excluded from cover under the policies by reason of Exclusion 7. 5. The fifth ground cavils with the finding that in June and November 2007, Ms Blacker gave notice to Allianz on behalf of the UCPT of facts for the purposes of s 40(3) in respect of all claims involving Mr Nisbett. 6. The final ground, which is in the alternative to grounds one to five, is that the primary judge erred in finding that the UCPT gave notice of facts and circumstances for the purpose of s 40(3) in the policy periods which he did, and that he should have found that notice was given in different policy periods. 7. The essential point of these grounds is that the UCPT became aware of LKA2 in 2004, with the dual consequence that it was unable to rely upon s 40(3) in 2007 or thereafter as any notification of it was too late and that any claims made in subsequent policy periods were beyond the scope of the relevant policy as a consequence of the insured's prior knowledge. 8. Some of those grounds overlap to a not insignificant degree and the myriad matters which they raise can be divided into nine issues, which can broadly be summarised as follows: 9. What were the facts revealed by LKA2 and, to the extent that they were ones which might give rise to a claim or claims for the purpose of s 40(3), what was the extent of those claims? 10. Can the knowledge of Mr Weeks, as the then Headmaster of Knox, or of some other person or persons, of the facts revealed by LKA2, be attributed to the UCPT for the purposes of s 40(3)? 11. Did the primary judge err in failing to find, for the purposes of s 40(3), that the UCPT was aware of the contents of LKA2 in or around 2006 or 2007? 12. Does Allianz's conduct, in both its dealings with the UCPT and the manner in which the trial occurred, preclude it from advancing the case which it seeks to make on appeal? 13. Having regard to the answers to issues 1 to 4, does LKA2 limit the scope of the UCPT's right to indemnity under s 40(3)? 14. Should the primary judge have found that the information in LKA2 and the associated materials recorded a claim, fact, circumstance or occurrence that may give rise to a claim for the purposes of Exclusion 7(c)? 15. If the answer to issue 6 is yes, is Exclusion 7(c) void for inconsistency with the ICA? 16. Does s 54 of the ICA apply so as to excuse a failure to comply with the requirement in s 40(3) to notify the insurer as soon as practicable after the insured becomes aware of facts that might give rise to a claim? 17. Finally, if by reason of the answers to the above issues the primary judge was in error, do any of the principles of estoppel, utmost good faith, waiver or election mean that Allianz cannot rely upon any failure to notify matters in LKA2? 18. Even this taxonomy of issues does not prevent some considerable overlap between them. That is particularly so in relation to the separate operations of s 40(3) and Exclusion 7 of the policies. The issues surrounding those matters turn upon the content of LKA2 and what it revealed. In the case of s 40(3), if LKA2 revealed a fact or facts which might give rise to a claim or claims against the insured, and notice of that fact or those facts were not given to Allianz during the policy period in which the insured became aware of them, the cover will not be extended to accommodate any subsequent resulting claims. 19. Similarly, subclause (c) of Exclusion 7 excludes cover in respect of any claim which arises from any claim, fact, circumstance or occurrence of which the insured was aware, prior to the relevant policy's inception, which might give rise to a claim. Therefore, if the claims of former students arose from the claims, facts, circumstances or occurrences in LKA2 and the insured knew of such matters in the 2004/2005 year, cover in respect of them will be excluded under subsequent policies. 20. Much turns on what was revealed by LKA2. In that respect, the UCPT conceded that it had been read from cover to cover by Knox's former Headmaster, Mr Weeks, when it was received, although that is a natural assumption in any event. The consequence of his becoming aware of its contents and particularly whether his knowledge can be attributed to that of the UCPT is discussed below. The policy terms 1. Before turning to a consideration of the grounds of appeal it is appropriate to set out the relevant policy terms. 2. Although the issues in this appeal are relatively generic across the 12-year period of insurance (being from 31 March 1999 to 31 March 2011), it is relevant that the policy wording differed from time to time. 3. The policies in each relevant year were entitled, "Malpractice Liability Insurance", "Professional Indemnity Insurance", or some variation of that. Generally, the insured was defined as, specifically, "The Uniting Church in Australia including:-" and, thereafter, reference was made to the several property trusts for the respective States or Territories, as well as other associations such as the Uniting Church Council of Mission Trust Association, the United Theological College, and the Uniting Church in Australia, National Assembly. On other occasions the additional insureds were initially identified as "The Uniting Church in Australia, Synods of" and reference was then made to the several states and to the Northern Territory. 4. In some policies there followed a general description of other entities within the scope of the word "Insureds". On one occasion the reference read as follows: … and including all those entities listed in the directories of The Uniting Church in Australia; Synod of Victoria and Tasmania, The Synod of New South Wales and the ACT, and the Northern Synod, and all other entities under the Uniting Church's effective management control or for which the Uniting Church is responsible and all their subsidiary and related corporations as defined in the Corporations Act 2001 (including those acquired during the Period of Insurance) for their respective rights and interests … 1. In the "Annexure A Endorsements" to the policies, cover was extended to the entities and persons who act in the performance of their duties in the businesses or activities of the Church. Though the wording of this part of the definition differed across the years, it was often in broad terms such as "constituent, related and affiliated bodies, institutions, associations or entities, now or hereafter formed by or on behalf of the Insured" as well as "educational services facilities or activities". The extension of cover to non-legal entities is indicative of an intention to ensure cover for all persons and groups within the UCA. 2. Despite the differences as between the policies with respect to their descriptions of the insureds, they were all broad and sought to include the numerous entities, associations and persons across Australia which were within the umbrella of the UCA. 3. Each of the policies was composite and the word "Insured" was to be construed as applying to each party comprising "the Insured", and in the same manner as if that party were the only party named as the insured. In that respect, after the extensions of the identified "Insureds" the following wording appeared: PROVIDED THAT in relation to the foregoing 1. Such person(s) shall comply with and be subject to the Terms, Conditions, Exceptions, Provisions and Memoranda of this Policy insofar as they can apply. 2. Where the "Insured" is comprised of more than one party the words "the Insured" shall be considered as applying to each party comprising the Insured in the same manner as if that party were the only party named herein as the Insured. 3. Nothing contained in this definition or Provisos 1 or 2 shall operate to increase the Company's Limit of Liability. (Emphasis in original). 1. There is no reason to think that, by reason of the above clause, Exclusion 7(c) would not apply individually to each of the insureds in relation to the cover afforded to them or, similarly, that s 40(3) would not apply to them to the extent to which relevant information was given to Allianz in relation to circumstances of which they became aware during a policy period. That is the natural effect of the severance clause which treats each insured as a separate insured. 2. The insuring clause in the 2005/2006 policy provided: Allianz Australia Insurance Limited (A.C.N 000 122 850) (hereinafter called the Company) hereby agrees, subject to payment of the premium specified in the Schedule and subject to the terms of this policy, to indemnify the Insured up to the Limit of Indemnity against all sums which the Insured shall become legally liable to pay as a result of any claim or claims first made against the Insured during the Period of Insurance and notified to the Company during the period for breach of professional duty arising out of any negligence whether by way of act, error or omission on the part of the Insured, in the conduct of the Insured's Profession as specified in the Schedule. (Emphasis added) 1. Similarly, although the precise terms of the insuring clause differed slightly from year to year, those variations made no relevant difference for the purposes of the issues on appeal. 2. It is undoubted that the insuring clause promises indemnity with respect to each insured in respect of their personal liability "for breach of professional duty arising out of any negligence whether by act, error or omission on the part of the Insured …". On the analysis discussed previously, subject to any feature to the contrary, this would prima facie indemnify each of the members of the School Council and the Headmasters in relation to any claims by former students founded on that insured's breach of professional duty by that insured party. It would not, however, cover the UCPT in relation to claims on another insured such as these, based upon such a breach by another insured, for the promise is expressly limited to cover the liability of the particular insured for a breach "on the part of the Insured". 3. The claims notification requirements of the policies over the years were usually contained in Condition 1, and though there were significant variations in relation to them, it is unfortunate that the parties tended to treat them as being somewhat generic. Helpfully, the learned primary judge set out the variations of this clause in his reasons for judgment at [59] – [62]. 4. He noted that, for the 1999/2000, 2000/2001 and 2001/2002 policy periods, Condition 1 was in the following terms: Upon the making of a claim against the Insured, or the making of any allegation or the discovery of any circumstance which indicates the possibility of a claim arising, the Insured shall notify the Company in writing immediately and shall provide to the company whatever information relating to the claim or possible claim is in the Insured's possession. If during the Period of Insurance the Insured becomes aware of any circumstance which may subsequently give rise to a claim against the Insured and during the Period of Insurance gives written notice to the Company of such circumstance, any claim which may subsequently be made against the Insured arising out of that circumstance shall be deemed for the purposes of this policy to have been made during the Period of Insurance. For the purpose of this condition only, "the Insured" shall mean "the General Secretary of the Synod". 1. In the 2002/2003 and 2003/2004 policy periods, the clause was slightly modified and read: Upon the making of a claim against the Insured, or the making of any allegation or the discovery of any circumstance which indicates the possibility of a claim arising, the Insured shall notify the Company in writing immediately and shall provide to the Company whatever information relating to the claim or possible claim is in the Insured's possession. For the purpose of this condition only, "the Insured" shall mean "the General Secretary of the Synod". 1. Conversely, in the 2004/2005 policy period, the clause was in the following terms: Upon the making of a Claim against the Insured, the Insured shall notify the Company in writing as soon as practicable after the Claim is made and shall provide to the Company whatever information relating to the Claim that is in the Insured's possession. For the purposes of this clause only, "the Insured" shall mean "the General Secretary of the Synod". 1. The clause was again modified in the following year, being the 2005/2006 policy period, where it read: Upon the making of a claim against the Insured, the Insured shall notify the Company in writing as soon as practicable after the Claim is made but during the period of insurance and shall provide to the Company whatever information relating to the Claim that is in the Insured's possession. For the purposes of this clause only, "the Insured" shall mean "the General Secretary of the Synod". (Emphasis in original). 1. It was submitted that Condition 1 assisted the UCPT's submission that the only knowledge relevant to the operation of s 40(3) and Exclusion 7(c) was that of the General Secretary of the Synod. That should be rejected and, indeed, it is evident on closer consideration that the opposite is true. 2. The several iterations of Condition 1 are inherently ambiguous. If read literally, they would apply only where claims were made against, or the possibility of a claim arose against, the General Secretary. On no view would that have been intended. This is an example of the poor drafting of insurance policies that has attracted courts' criticism from time to time. It is a basic feature of a "claims made and notified" trigger of cover, associated with an extension as to possible claims, and as such, it has to be inclusive of all insureds. It is not reasonably possible to draw any implication from it that may be relevant to this matter. 3. Condition 1 might be understood to mean that, whenever a claim is made or is considered possible against any of the entities covered by the policy, it is the General Secretary of the relevant Synod who is to give Allianz notice of it. Such a provision has the advantage of the notification of claims being funnelled through the one point of contact within the particular Synod, which avoids difficulties which might arise if every insured possibly involved were to notify. This may also have been to the administrative benefit of Allianz. So much is not unexpected in the context of a composite policy which provides cover for an exceptionally large single organisation composed of a diffuse group of multiple insureds. 4. To the extent to which the clauses refer to the giving of notification of potential claims by the General Secretary in the 1999/2000 to the 2003/2004 policy periods, they confer an obvious benefit on Allianz in relation to any extension of the policy coverage under s 40(3). By limiting it to one person or office, the scope for any disputation as to whether notice had been given would be substantially diminished. There is no need to consider whether that limitation is unenforceable or ineffective by reason of its possible inconsistency with the broad wording of s 40(3). 5. Importantly, the clauses have nothing to say about the knowledge of the insureds under the policy or its attribution. 6. Despite the submissions to the contrary, until the end of the 2003/2004 policy period, they had two functions. First, they made provision for the notification of claims which were made against any of the insureds under the policy in accordance with the trigger of cover and, secondly, they made provision for the giving of notice of any potential claims as similarly provided by s 40(3). That duality was abandoned in the 2004/2005 policy, when its only function was the former. The effect of s 40(3) made the contractual extension redundant. If anything, the change in the wording of Condition 1 suggests that the parties intended the subsequent policies to operate differently, with the obligation for the notification of facts which might give rise to a claim falling on each insured or, at least, not necessarily funnelled through the General Secretary. 7. These clauses do not suggest any intention to negate the specific statement in the proviso to the definition of "the Insured", that all of the insureds were subject to the terms, conditions and memorandum of the policy. That would include Exclusion 7, which read (subject to variations in particular years): This Policy does not cover any Claim for any liability for or arising directly or indirectly from: … 7. Prior Claims & Circumstances any Claim, fact, circumstance or occurrence; a. in respect of which notice has been given to the Company or any other insurer under a previous insurance policy, or b. disclosed or communicated to the Company in the proposal or declaration or otherwise before the commencement of the Period of Insurance, or c. of which the Insured is aware before the commencement of the Period of Insurance, which may give rise to a claim. This exclusion is independent of and shall not affect the Company's other rights regarding misrepresentation and non-disclosure; 1. This clause, and particularly subclause (c), applies to each insured and limits the scope of the coverage to which they are separately entitled under the policy. Whatever may have been the protocol for notification to the insurer of potential claims or facts which might give rise to a claim, that could not extend each insured's cover. Issue 1 – Facts revealed by LKA2 1. Whether a fact known by an insured has the characteristic that it is one that may give rise to a claim is necessarily determined by a consideration of it in its context. This approach was relied upon by the primary judge and after its application to the facts before him, the substance of his conclusions was that LKA2, by itself, was benign in that the facts revealed were not of a nature that might give rise to a claim. Rather, he found it was only being the subsequent making of claims against Knox by former students and the arrest of some teachers for child sexual abuse, that LKA2 acquired a different "hue". His Honour found that this lately acquired complexion revealed the existence of a problem at the school of the sexual abuse of students by Mr Nisbett. 2. Allianz submits that no such metamorphosis of the facts contained in LKA2 was required and that, as the facts appeared in the report, they were sufficient to objectively indicate the possibility that claims might be made against one or more of the insureds under the policies of insurance by a former student or students in relation to the sexual abuse which they had suffered. The context in which LKA2 was commissioned 1. The import of LKA2 and what it revealed needs to be assessed in the context of the production and presentation to the Headmaster of Knox of the initial report, being LKA1. 2. Its commissioning arose following a complaint made against Mr Nisbett by the mother of a former student, TPC1, on 20 November 2003 to Knox's then Headmaster. The boy's mother alleged that, on the last day of his attendance at Knox, Mr Nisbett had taken him to his own house for dinner and had offered him alcohol, cigarettes, and a hug. The boy, who had been in a distressed or vulnerable state at that time as the result of his parents' separation, had returned home after the encounter with Mr Nisbett, and was somewhat traumatised by the experience. 3. The Headmaster had made a very detailed note of his conversation with the child's mother, and immediately made contact with the Association of Independent Schools. Following that he commissioned an external investigation through LKA Risk Services Pty Ltd, of which Mr Wilson was its principal. At around this time, Mr Wilson had advised the Headmaster to contact the State Ombudsman and the Commission for Children and Young People about the complaint, which he did. 4. For the purposes of this initial investigation, Mr Wilson was able to interview only Mr Nisbett who made certain admissions about his encounter with TPC1. The report, LKA1, was delivered on 4 December 2003. In it, Mr Wilson found that Mr Nisbett's conduct in relation to TPC1 constituted unprofessional behaviour requiring disciplinary action, but did not constitute child abuse. 5. There is a sufficiently clear inference that the Headmaster's purpose in obtaining the report was to ascertain whether TPC1 had been sexually abused by Mr Nisbett and that was, naturally enough, also the concern of LKA1. So much is confirmed by the inclusion in the report of a section of a document from the New South Wales Ombudsman entitled, "Child Protection: Responding to Allegations of Child Abuse Against Employees". It identified what was then, and still is, regarded as the three stages of grooming, namely: 6. Building trust – spending special time with the child, giving gifts, showing special favours, allowing the child to over step rules etc. 7. Testing of boundaries – undressing in front of the child, allowing the child to sit on the lap, talking about sex, accidental touching of genitals etc. 8. Engaging in sexual activity – this activity generally increases in severity over time. 9. The conduct in each stage is regarded as "grooming" where it involves a pattern of behaviour, though obviously it increases in severity through the stages. 10. Certainly, the material surrounding the commissioning of LKA1, and the report itself demonstrated a heightened awareness by Knox's Headmaster of the possibility that some sexual abuse of students might have occurred. 11. Despite LKA1's conclusion, the Headmaster caused it to be delivered to the UCA's "manager, risk insurance group", Mr Piening, who forwarded it to the UCA's insurance broker, Marsh Insurance Brokers (Marsh), which, in turn, reported it to Allianz. Subsequently, Marsh sent two memos to Allianz about the matter and, ultimately, they were regarded by the primary judge as sufficient notification under s 40(3) that a claim may be made by TPC1. Such a claim was subsequently made by TPC1, who commenced proceedings in 2006 alleging that Mr Nisbett had sexually assaulted him on that occasion in 2003. 12. Pausing here, LKA1 had been commissioned by reason of the school's concern that the sexual abuse of a boy might have occurred. Importantly, its receipt prompted its notification to the school's insurer and it was accepted by the primary judge as revealing facts which might give rise to a claim for damages as a result of the occasioning of sexual abuse. Whilst that finding is not challenged, it puts into perspective the much more revealing subsequent report which was found not to have disclosed any fact from which a claim might be made. 13. In early 2004, a new Headmaster of Knox was appointed, being Mr Weeks, who, being aware of LKA1 and after being informed by senior staff of allegations or rumours of the sexual abuse of boys by Mr Nisbett dating back to the 1980s, instructed Mr Wilson to undertake a further investigation regarding all such matters. 14. From the commencement of that investigation, Mr Wilson identified that the potential victims of abuse went well beyond TPC1. He also received information indicating that there was a risk that inappropriate sexual behaviour towards boys by a number of other teachers had been occurring over many years. It was not surprising that, as between the school (Mr Piening) and its insurance broker (Mr Dennis), the risk of litigation in relation to that abuse was a topic of discussion at this time. 15. In the course of this second investigation, Mr Wilson's attention was specifically drawn to the activities of certain other teachers, including Mr Vance, Mr Christopher Fotis and Mr Treloar. Although the investigation was not directed at those other teachers, information about them emerged incidentally. Nonetheless, on 30 March 2004, Mr Wilson sought the staff files of Mr Vance and Mr Fotis, and later sought copies of the files of Mr Treloar. 16. The investigation into Mr Nisbett's conduct was undertaken over a period of months and, on this occasion, numerous people were interviewed including former headmasters, former and current teachers, staff at Knox and former students. 17. Mr Wilson produced his second report, LKA2, on 7 May 2004 and provided it to Mr Weeks that same day. The content of LKA2 1. LKA2 and its associated material constituted a physically and informationally substantial document. A copy was provided to the Court in the course of the appeal. It is contained in two lever arch files of paper with printing on each side. The text of Mr Wilson's written report is 19 pages, and much of the remainder of the documents were obtained in the course of the investigation. Importantly, they include transcripts of interviews with many people and numerous other documents. The text of the report 1. In his report Mr Wilson notes that, at the time of his initial investigation for the purposes of LKA1, he had not been made aware of the allegations concerning Mr Nisbett's conduct dating back to around 1986, which might have constituted grooming. He also records that he had ascertained that an investigation concerning Mr Nisbett's conduct had been carried out in 1986 by a staff member at the school (who, for these proceedings, was given the cypher PTPC39) and, on a report's being made to the then Headmaster, Mr Nisbett was removed from his position as a boarding house master. For reasons which are not known, he was subsequently reinstated, albeit in charge of a different house. 2. The report then summarises the evidence sourced from the several witnesses, which included the following: 3. Allegations made by three other students from the 1990s to a former school administrator about inappropriate conduct by Mr Nisbett. 4. The person referred to as PTPC39, was of no doubt that there was a pattern of his questionable behaviour towards several students, which would be characterised as grooming. He had not, however, received any allegations of sexual activity. 5. A former teacher at the school had knowledge of rumours from numerous students over a number of years of dubious practices of a sexual nature by Mr Nisbett, but he was not aware of any actual evidence to support them. Although he had heard these rumours regularly, he took no action because no boy came to him directly. 6. Another former teacher was aware of an incident involving Mr Nisbett in 1986 in a photography darkroom at the school when a boy was allegedly sexually assaulted, as well as general rumours about his conduct over a number of years. 7. One former boarding house master recalled an incident when Mr Nisbett had touched the belt of a boy which had made the boy uncomfortable. 8. A former student, who presented as a creditable witness, gave evidence of inappropriate touching by Mr Nisbett when they were in the photographic darkroom of the school. 9. In his conclusions, Mr Wilson determined that several "allegations", that had been formulated against Mr Nisbett, had been sustained by the investigation. They included the following: 10. Prior to 1987, whilst Mr Nisbett was a member of the boarding staff at Ewan House, and the Boarding Master, he "favoured particular boys who were either good looking athletes or sportsmen, or who were upset such as in cases of homesickness". Further, he "spent particular time with these boys alone and engaged in long conversations with them, sometimes in [his] room, the staffroom, Ewan House, and walking around the School". 11. Prior to 1987, whilst Mr Nisbett was the Boarding Master, he invited certain boys, including a boy referred to as PTPC3, to his flat at Ewan House and spent extended periods of time there, alone with them. 12. Prior to 1987, whilst Mr Nisbett was the Boarding Master, at various locations including the boarding house, he had intimate conversations "with particular boys whom [he] favoured, [he] said to them words to the effect of, 'Tell me secrets about yourself. Tell me what you like doing. Tell me what you don't like doing. How do you get on with your parents? What do you like about your father? Do you like men? Do you have feelings for men? Are you interested in a homosexual lifestyle?'". 13. Prior to 1987, whilst Mr Nisbett was the Boarding Master, he took photographs of boys and invited them to the photography darkroom to witness the development process. On one occasion, when he was in the darkroom with a boy, namely PTPC3, Mr Nisbett brushed past him in a manner that caused the boy concern which led him to report the matter to a member of staff. 14. During 1986, following an investigation into various matters relating to Mr Nisbett's alleged conduct, the Headmaster, Dr Ian Paterson, removed him from his position as the Boarding Master at Ewan House. 15. In the period up to the early 2000s, while he was a member of the boarding staff or the House Master at Kooyong House, Mr Nisbett was often in close external physical proximity to a building where boarders resided. On one occasion, he was near a fence behind that building looking into the building, and was said to have waved at a naked boy who had just returned from the showers and taken his towel off. 16. During 1986, Mr Nisbett pulled a year 11 student, TPC2, into the photographic darkroom in his quarters at Ewan House, under the pretext of teaching him how to focus a photographic device similar to a microscope. He stood in front of the student with his back to him and used the device. The student was standing close behind Mr Nisbett, and his left leg was approximately in line with Mr Nisbett's right buttock. Mr Nisbett's right elbow came into contact with the boy's groin. The boy thought this was an accident, but then Mr Nisbett's elbow found its way back to his groin and rubbed his groin continuously. 17. Mr Wilson recorded that those findings had been made on the balance of probabilities, but the evidence did not reach the standard of "beyond reasonable doubt". He also concluded that the allegations which had been made out covered each of the three stages of grooming including inappropriate sexual touching. In a summary paragraph, he stated: The allegations placed before Mr. Nisbett were placed under the heading of behaviour which may constitute grooming in the sexual abuse context and failing to meet the professional standards expected of you as an employee. I find that there is sufficient evidence to sustain an allegation that Adrian Nisbett behaved in a way which constituted grooming in the sexual abuse context and that he failed to meet the professional standards expected of him as an employee of the Knox Grammar School. I find that the matter requires disciplinary action. (Emphasis in original). 1. He considered certain other allegations which he concluded could not be established on the balance of probabilities. He did not find that these matters had not occurred, but merely that he was unable to locate sufficient evidence to support them to that standard. Those allegations included the following: 2. Prior to 1987, in his office at Knox, Mr Nisbett allowed a student to change his clothing in his presence. 3. Prior to 1987, while he was a member of the boarding staff at Ewan House, including being the Boarding Master, he placed his hand on a boy's bottom whilst the boy was climbing a ladder. 4. Prior to 1987, he invited students into his room, including PTPC3, and showed them homosexual, pornographic, printed material. 5. Prior to 1987, he offered boys alcohol at Ewan House. 6. Prior to 1987, whilst individual students were alone in dormitories at Ewan House, he sat on their beds and had conversations with them that left them feeling very strange. 7. At around the same time at Ewan House, he offered boys tobacco or cigarettes. 8. During 1984 or 1985, while he was the Boarding Master at Ewan House, he touched the belt of a student, namely PTPC23, in a manner that caused him to discuss it with another member of the boarding staff. 9. In the late 1980s or early 1990s, when he was a member of the boarding staff at Kooyong House, a student was sitting on the couch in his office. He took hold of the boy's tie and in doing so touched the boy's genitals in a way that caused the boy to discuss the matter with another member of staff. 10. During the period up to the early 2000s, when he was a member of the boarding staff or the House Master at Kooyong House, on a number of occasions he entered boys' rooms as they were getting changed after returning from the showers. On one occasion, even though a boy placed his foot against the door and said words to the effect that he was getting changed, he continued to push on the door. 11. During the 1980s, while in attendance at cadet camps, he spent an inordinate amount of time in the showers watching the boys. 12. For present purposes, the allegations underlying these additional matters are important. Whilst lacking sufficient proof to be accepted as fact, it is not doubted that allegations were made that the events occurred. In the context of whether they constituted notifiable facts, they derive at least some veracity from their association with the similar allegations which were established. In any event, even if physical proof was not always available to Mr Wilson, that did not mean that it would not be available to a complainant; and the issue is not knowledge of a particular fact but knowledge of circumstances pregnant with the possibility of a claim. 13. LKA2 also contained a letter to Knox dated 7 May 2004, in which Mr Wilson provided a "Supplementary Risk Assessment Report". In it, he indicated that, had he been aware of the allegations against Mr Nisbett from the 1980s and 1990s, the risk assessment report appearing in LKA1 would have been substantially different. For that reason, he considered the findings from both investigations to arrive at an overall risk assessment in relation to all the matters investigated. It is appropriate to set out his conclusions in full. He said: RISK ASSESSMENT Two allegations were investigated during the 2003 investigation. The first of these allegations was: "In 2002 after the end of Business Week, you went to the home of a year 10 student, namely [TPC1], at 7.30 p.m. one evening. With his mother's permission you took him to your home. During the time [TPC1] was at your home you offered him alcohol, cigarettes and a hug." The finding in relation to this allegation was – "I find that the allegation was not one of child abuse but might constitute a breach of professional behaviour or judgement which requires further professional disciplinary action." At the time of the 2003 investigation I was not made aware of any earlier allegations, particularly those relating to the 1980s and 1990s that have been part of the 2004 investigation. Had I been made aware of these previous allegations, I would have advised that these were matters that required reporting to the NSW Ombudsman and investigation. I completed a risk assessment at the conclusion of the 2003 investigation. Had I been aware of the previous allegations and these had been investigated and the findings that I have reached in the 2004 investigation had been available, the risk assessment at the end of 2003 would have been considerably different. In this supplementary report I have considered the allegations and findings from both the 2003 and the 2004 investigation to arrive at an overall risk assessment. I note the similarity between the allegations from the 1980s and 1990s and the allegations relating to 2002. The elements of similarity are the offering of alcohol and cigarettes; physical contact and being alone with students in an isolated place, in the earlier allegations in Mr. Nisbett's living quarters and Ewan House and the latter allegation at Mr. Nisbett's home. The similarity in the allegations, which are separated by a time period of some eighteen years, is striking and causes concern. Other issues of concern are: 1. That Mr. Nisbett was not made fully aware of the allegations being made against him in 1986, the findings from that investigation and the reasons why he was "removed" from Ewan House. 2. That Mr. Nisbett being removed "from Ewan House" because of concerns about his behaviour towards students was, without any apparent direct action being taken to change his behaviour, allowed to resume a boarding position at Kooyong House with the same age group of boys who had been at Ewan House three years later. 3. That Mr. Nisbett has continued to hold senior positions within the Knox Grammar School where he has come into daily contact with students who may have been exposed to inappropriate behaviour on his part. 4. That no apparent action appears to have been taken in relation to the continuing damage to Mr. Nisbett's reputation and the reputation of the Knox Grammar School over a long period of time by untested rumours apparently continuing to circulate in the school community. 5. I attach excerpts from interviews with [PTPC14] and Adrian Nisbett relating to [TPC1] for your information and consideration. [TPC14] became particularly distressed when talking about this matter. His wife appears to have spoken to [TPC1's mother] and may have more detailed, relevant information. You may wish to consider giving instructions for [TPC1's mother] to be interviewed. I draw to your attention the evidence contained in interview transcripts relating to the highly questionable conduct of a small number of staff who appear to have left Knox overnight due to concerns about their behaviour. No risks have been assessed in relation to these people as they are no longer employees, however due to the concern expressed over missing records in relation to the current investigation, it is recommended that you take steps to adequately secure all records relating to this investigation, the previous investigation and matters relating to alleged improper conduct of any other employee. The overall risk assessment is at FOLIO 1138. … (Emphasis in original). 1. It might be observed that if the information caused Mr Wilson concern, it should also be thought to cause the insurer concern, not only because a claim or claims would involve it in costs even if the claims all failed, despite the weight of evidence in the civil standard of proof. 2. Regarding the risks in relation to former students, the overall risk assessment stated: Risk to alleged victims: Consequence: Moderate Likelihood: Moderate Risk rating and comment: High There is a pattern of alleged and some sustained behaviour from the 1980s and early 1990s. All alleged victims are no longer in the school. Any injury is likely to have already occurred. There is little the school can do to control any risk to these ex-students other than to provide a hearing to them if they do approach the school with concerns. It is possible that any breach of confidentiality in relation to the current investigation and actions stemming from it could stimulate other ex-students or students to bring forward allegations. (Emphasis in original). 1. The risk to other students at the school was identified as being: Risk to other students: Consequence: Major Likelihood: Moderate Risk rating and comment: Extreme The allegations from the 1980s and 1990s are indicative of grooming behaviours. The School has mitigated any risk to current students by placing Mr. Nisbett in alternative duties that reduce his contact with students and increasing supervision during the investigation. Mr. Nisbett at interview admitted to a number of behaviours that placed him in close contact with boys and are generally consistent with his role in a boarding house. He denied any inappropriate or sexual conduct. Findings of sustained allegations require appropriate action to control any risk to current students. The risk to current students will need to be determined once the employer has determined what action if any will be taken following the investigation. Mr. Nisbett's explanation of his lapse of judgement in relation to [TPC1] (2003 investigation) is strongly tested by the evidence from the 2004 investigation. (Emphasis in original). 1. The risk to the school was also identified as being "Extreme". The risk assessment concluded that the school's reputation was at risk. It reiterated the concern that, despite Mr Nisbett's having been removed from a boarding house in 1987 as a result of issues which were investigated in the previous year, he was subsequently placed back in charge of a boarding house, and he held other senior positions within the school that brought him into close contact with students. It opined that the school is exposed because there is no strong sense of any action being taken to limit the risk to students after the 1986 investigation. It concluded with the presaging comment that the school "may also be at risk from yet unmade claims of students or ex-students based on a perceived lack of duty of care". 2. In the context of this matter, the warning was prophetic in its anticipation that past students coming forward with claims of abuse would motivate other past students who had suffered abuse to do the same. 3. In the context of whether the insured would reasonably conclude that a claim might be made, it is relevant that, in the course of the investigation, both Mr Weeks and Dr Paterson, the then current and former Headmasters, indicated to Mr Wilson their concern that litigation might ensue. The transcripts included in LKA2 and other materials 1. It is fair comment that Mr Wilson's written report focused on Mr Nisbett's conduct and that, relative to the nature of the findings, he couched it in somewhat anaemic or, perhaps, mild and cautious, terms given the gravity of what he had discovered. Despite that, his very real concerns were reflected in his conclusions and expressed in his risk assessments. Moreover, the report itself indicates that it should be read "in full" which would include the transcripts. It is, therefore, both necessary and appropriate to assay the content of the transcripts included with LKA2 to some degree, noting that during the hearing of the appeal, the Court was taken extensively to them. 2. A perusal of the whole report, and especially the included transcripts, reveals that the range of persons possibly engaged in improper conduct towards students at the school extended beyond Mr Nisbett. For instance, a former student, TPC2, stated that a teacher, Mr Vance, had admitted to sexual activity with students and having a relationship with a student. That former student also described that the behaviour of Mr Vance towards students would meet the description of "grooming". More significantly, he also claimed to have been sexually assaulted by Mr Nisbett, and indicated that he had heard of other students having been assaulted in the same manner. 3. The transcript of an interview with PTPC39, a former General Duties Master at the school, reveals that he had received numerous reports from students that Mr Nisbett played favourites with the boys, spent significant periods alone with some of them, had shown some boys pornography, and had been sexually touching boys. He also reported that a past student had stated that Mr Nisbett had invited him into his room where he was alone with him, had shown him pornographic homosexual material, and asked him if he was interested in the homosexual lifestyle. 4. He had also detected evidence of an escalating pattern of behaviour by Mr Nisbett over a number of years, which he described as meeting the definitions of the first and second stages of grooming. He recalled that he had heard that Mr Nisbett had invited boys into his room for extended periods, would show them pornography, and offer them alcohol and cigarettes. On his own volition, PTPC39 conducted an investigation into Mr Nisbett and, whilst he did not find any evidence of sexual assault, he recommended to the Headmaster at the time, Dr Paterson, that Mr Nisbett be removed from boarding house duties. That recommendation was made because he was satisfied that Mr Nisbett's conduct met the definition of, at least, what would be described as the first stage of grooming. He also expressed the view that Mr Nisbett's pattern of behaviour with boys would likely result in him engaging in sexual activity with one or some of them over time. He reached that conclusion on the basis that it would be unlikely that someone who engages in the identified conduct over an extended period would stop at mere grooming, and it would be unlikely that they would stop grooming as well. He had sufficient experience in relation to child sexual abuse to make those observations. 5. In an interview, Mr Wilson provided to Dr Paterson information about Mr Nisbett's allowing a boy to change into gym clothes in his room whilst he was there, putting his hand on a student's bottom whilst he was on a ladder, and touching boys while they were engaged in sport. At a subsequent interview Dr Paterson expressed concern about the risk of litigation consequent upon Mr Nisbett's conduct. He also recalled arranging for investigations to be undertaken in relation to Mr Nisbett's showing boys homosexual pornographic material and giving them alcohol and cigarettes. 6. During the investigation, certain school records were considered, and they included a single sheet of paper which suggested the occurrence of the sexual molestation of students in around the mid-1990s. 7. In a further interview, Dr Paterson revealed that he had summarily removed two teachers from the school overnight on separate occasions. One was Mr Vance, who had allegedly touched a boy inappropriately, and the other was Mr Fotis, also following incidents with boys. Dr Paterson had said that the incidents with these other teachers occurred sometime after 1995 or 1996, being after Mr Nisbett had been removed from his position as a boarding master. 8. During the course of the investigation, on 19 March 2004, Mr Wilson met with Mr Weeks. A file note of that meeting discloses that Mr Wilson was adopting a very conservative approach to his investigation, one that predicted a serious risk to the discovery and revelation of claims, and an intention to avoid injury for ulterior reasons associated with harm to the school's reputation. It records that he said: There are a number of people who may have information but there is a limit to making general enquiries and this can create unwanted attention for all concerned. 1. Mr Wilson recorded that Mr Weeks agreed with his indication of the direction he was taking with the investigation. 2. This is relevant to the context of LKA2, in that it showed that it was not intended to be a full and definitive report on all of the allegations which had been received and their full depth. On the contrary, the scope and depth of the investigation and report were to be limited and lines of investigation would be avoided lest they generate a wider interest in the matter. It was also clear that it was intended that it would be conducted in such a way as to minimise unwanted attention. 3. Another former teacher, PTPC41, also reported that Mr Nisbett had touched a boy's genitals, watched boys who were naked after their showers, and entered their rooms when they were getting changed, even when they tried to prevent him from doing so. 4. A former Chaplain had expressed concerns as a result of hearing rumours about Mr Nisbett's having engaged in dubious practices in the nature of improper sexual activity with students in the photographic darkroom and on cadet camps, and that he had shown an inordinate amount of interest in watching boys whilst they showered. He stated that boys had said to him that Mr Nisbett had been "touching up" or "feeling up" students and that most boarders had said such things. He also recalled being told that Mr Nisbett had been alone in his room with boys for extended periods and had shown them pornographic material. 5. It is appropriate to pause at this point to observe that, whilst this Chaplain had heard rumours about Mr Nisbett's engaging in improper homosexual activities with students, he was unconcerned as he had "always assumed that … if anything did happen it was mutual". It is unclear why he would believe that whatever sexual relationships Mr Nisbett could have with minors in his charge could be "mutual", nevertheless, it suggests knowledge that such relationships had, or may have, existed with some tacit acceptance of them. Even then, having regard to the parties' related status, it should have been known that it was not acceptable. 6. The transcript of a conversation with an administrative officer from Knox, PTPC4, reveals that Mr Wilson was told of "question marks" around the inappropriate behaviour of Mr Fotis, Mr Vance and three other teachers. He believed that the first two had left the school suddenly and, indeed, overnight following the authorities' discovery of incidents with boys coming to light. 7. It is not feasible to traverse in detail the wide array of transcripts included as the materials connected to LKA2, but the foregoing is sufficient to reveal the nature of the knowledge and concerns held by the school's authorities in relation to Mr Nisbett and others. Other particular allegations and facts revealed in the materials in LKA2 are addressed below. 8. The materials further included working documents showing Mr Wilson's analysis of evidence in relation to each of the allegations raised against Mr Nisbett. He set out those parts of interviews relevant to the allegation, identified any documents on which he relied, and set out his reasons for his conclusions. He analysed each of the allegations and expressed a conclusion as to whether they were "sustained" or "not sustained". The primary judge's conclusions as to what LKA2 disclosed 1. The learned primary judge's findings in relation to LKA2 were relatively brief. At [128] of his reasons, he set out the executive summary contained in LKA2. It is not unfair to characterise that summary as somewhat tepid when compared to the information found in the body of the report and its accompanying materials. 2. Later in his reasons, his Honour observed (at [401]) that LKA2 was "concerned with allegations of sexual abuse against Nisbett concerning multiple former students" and that it identified that he had sexually assaulted two students. At [412], his Honour noted that it contains "some relatively startling information which, in the ordinary scheme of human experience, is not prone to forgetfulness". 3. Subsequently, at [460], he observed that whilst LKA2 was indicative of a notifiable "problem", it was of a substantially lesser type than the bulk notifications which were subsequently given by the school. It was important to him that, at the time of LKA2's delivery, there had only been one claim made to the school (being the claims of TPC1) and that LKA2 broadly described historical rumours which had been dormant for 20 years. He noted that there was no hint that a second claim was to be made even though TPC2 had been interviewed about the abuse to which he had been subject. His Honour then characterised LKA2 as giving rise to a "bare possibility" of the making of a claim, which he held to be insufficient to qualify as a "fact" for the purposes of the issue of the timely notification as required by s 40(3). That conclusion appears to have been reached due to the absence of any corresponding contemporaneous complaint in relation to the events which had occurred. 4. For completeness, his Honour concluded that the colour of LKA2 altered in the light of TPC1's more serious claim made in 2006/2007, and an investigation's being commenced by the New South Wales Police into the sexual abuse of students at Knox. He added (at [461]) that such matters and the attendant publicity gave an "immediacy" to the historical complaints and, at that point, LKA2 revealed a "problem" that might give rise to a claim. 5. With great respect, for the reasons which follow, the revelations contained in LKA2 were far more significant than his Honour's description of them. In the context in which they were explained during the appeal, the matters revealed gave rise to more than the "bare possibility" of a claim being made. It identified at least the possible existence of actual historical sexual abuse of students at the school by more than one teacher and of an environment and activities from which it might be expected that further instances of it would emerge. Indeed, the report expressly warned that such claims against the school might well be made. Whilst it may be that the subsequent making of numerous substantial claims against the school in relation to the sexual abuse of boys by a number of teachers opened the floodgates for further claims, that did not diminish the immediacy of the potential for such claims from the matters revealed by LKA2. Did LKA2 reveal facts which might give rise to a claim? 1. The question which now arises is whether the nature of the facts revealed by LKA2 were of such a character that they were apt to be disclosed under s 40(3). The nature of facts within the scope of s 40(3) 1. Relevantly for present purposes, ss 40(1) and (3) of the ICA provide as follows: 40 Certain contracts of liability insurance (1) This section applies in relation to a contract of liability insurance the effect of which is that the insurer's liability is excluded or limited by reason that notice of a claim against the insured in respect of a loss suffered by some other person is not given to the insurer before the expiration of the period of the insurance cover provided by the contract. … (3) Where the insured gave notice in writing to the insurer of facts that might give rise to a claim against the insured as soon as was reasonably practicable after the insured became aware of those facts but before the insurance cover provided by the contract expired, the insurer is not relieved of liability under the contract in respect of the claim, when made, by reason only that it was made after the expiration of the period of the insurance cover provided by the contract. 1. There is no express or implied operation of this section to the effect that the insurer's liability is excluded or limited by reason that notice of the facts which might give rise to a claim is not given prior to the expiration of the period of cover. That consequence is a result of the policy's operation which is recognised in s 40(1). Section 40(3) is facilitative but it is triggered only if notice is given as soon as reasonably practicable after the insured became aware of the relevant fact and within the policy period. Only then is the policy's operation extended in relation to claims which arise from the notified facts, even if they are made after the policy's expiration. If no such notice is given, the cover provided by the policy ceases according to its terms. 2. On the ordinary meaning of the words used in s 40(1), it would have no application to the present "claims made" policies which have no provision excluding claims by reason of the absence of the giving of a notice of a claim in the policy period. However, in Newcastle City Council v GIO General Ltd (1997) 191 CLR 85, 103 (Newcastle City Council v GIO), the High Court gave the section an expansive operation such that it applies in circumstances where a policy operates in a particular case to produce the stipulated effect. Therefore, in this matter, had notice of a claim being made been given to Allianz in the 2004/2005 policy period, that policy would have responded. As notice was not given, the effect of the policy was that liability for the claim was excluded. Therefore, the policy had the required effect as prescribed by s 40(1) though no claim had been made against any insured in the relevant period. 3. Section 40 plainly interferes with the parties' contractual freedom and, particularly, the insurer's right to limit its exposure to claims notified during the relevant policy period. The extension effected by the section creates uncertainty for insurers and reduces their ability to calculate the extent of any potential liability and to arrange reserves when the policy term concludes. That uncertainty is enlarged by the degree of flexibility of the expression, "facts that might give rise to a claim against the insured". However, the authorities have thus far mitigated that uncertainty somewhat by requiring that the word "facts" in the section be limited to objective facts; that is, the "fact" must be an objectively verifiable piece of substantive data. Only information of that nature can be of any practical safety to an insurer which, on being informed of it, might take appropriate action to protect itself or to minimise any loss or damage which might arise from such potential claims. Subjective opinions or beliefs of the insured as to theoretical possibilities of future claims are not facts, and the communication of them to an insurer can serve no operative purpose in relation to s 40(3). 4. For similar reasons, whether the fact is one which might give rise to a claim requires objective assessment. Only facts which are reasonably indicative of the possibility of a claim's being made against the insured are within the section's scope, as an insurer can rationally act only upon notice of such facts to organise its affairs. Were it otherwise, an insured could give notice of matters that only give rise to a faint, remote or vague possibility of a claim, which would then have the effect of substantially expanding the duration of a policy's cover to any claim which might arise in the future in respect of any of the insured's past conduct. That was obviously not the legislative intention. 5. Similarly, the notice must be given in a timely manner and prior to the end of the policy period, which would permit the insurer to take any appropriate remedial action that might be available. A construction which is counter to the purpose of the requirement as to the timeliness of the giving of notice of the relevant fact would undermine the protection which is otherwise fairly afforded to the insurer. The authorities 1. With those general observations in mind, it is appropriate to identify the interpretation given to s 40 by the relevant authorities. In that respect, it is fortunate that a careful analysis of it was undertaken by Meagher JA, in his Honour's customary erudite manner, in P & S Kauter Investments Pty Ltd v Arch Underwriting at Lloyds Ltd (2021) 105 NSWLR 110 (P & S Kauter Investments). There, his Honour (with whom Bathurst CJ and Bell P agreed) relevantly held the following: 2. The requirement that there be a notification of "facts" indicates that s 40(3) is concerned with the notification of objective matters, rather than beliefs or opinions as to the possibility of a claim being made (at 119 – 120 [33]). 3. Similarly, the characterisation of a fact as one "which might give rise to a claim", needs to be undertaken objectively, in the sense that the fact must be reasonably regarded as having that quality. For a fact to be capable of use for effective notification under s 40(3), it must be such that a "reasonable person in the insured's position would recognise a real risk of a claim" (at 120 [34] – [35]). That assessment is made in relation to the fact taken alone or together with other notifiable facts (at 119 – 120 [33]). 4. The requirement that there be a possibility of a "claim", as opposed to the possibility of a liability, means that s 40(3) encompasses claims which may not have "significant prospects of success", or which have merely modest or limited prospects (at 119 – 120 [33]). 5. Facts which are likely to give rise to a claim do not include those where no loss has been suffered or where loss is a mere potential possibility (at 120 [37]). Facts which amount to only a breach of a legal standard, but without any suggestion that any third person has suffered loss or damage, do not suggest that the insured will incur liability, and are not of a nature that might give rise to a claim (at 122 [43]). 6. There needs to "be a sufficient correspondence between the facts notified and those which are actually made in the subsequent claim for the latter to be identified as 'the' claim or a claim arising or resulting from those facts" (at 119 [31]). 7. However, it is not necessary that the facts notify the existence of a particular claimant or claimants and it is sufficient if the notification is of a "problem" which may of itself give rise to claims by persons having particular characteristics, even if the quantum of such claims and the identity of any claimants may not be known at the date of notification (at 119 [31], citing DIF III — Global Co-Investment Fund L.P v DIF Capital Partners Limited [2020] NSWCA 124 [171] (DIF III)). 8. The temporal element was explained (at 119 [32]) as follows: … The requirement that the notification be made "as soon as was reasonably practicable after the insured became aware of those facts" is concerned to provide the insurer with knowledge of claims that "might" be made shortly after the insured acquires that knowledge. That characteristic of the notified facts will enable the insurer to evaluate the potential claim or claims, or notified "problem", and provide an opportunity to take steps to avert or minimise or resolve any potential insured loss: as to which see J Rothschild Assurance plc v Collyear [1999] 1 Lloyd's Rep IR 6 at 22; [1998] EWHC 1205 (Comm) at [78] (Rix J). It also allows the insurer to "more accurately fix its reserves for future liabilities and compute premiums": see Federal Deposit Insurance Corporation v St Paul Fire and Marine Insurance Co 993 F 2d 155 at 158 (1993), cited by Giles CJ Comm D in Antico v CE Heath Casualty & General Insurance Ltd (1995) 8 ANZ Insurance Cases 61-268 at 76,003. 1. The construction of s 40(3) should adopt a purposive approach as occurred in Newcastle City Council v GIO at 101; the consequence is that whether a fact was notifiable is to be determined by an "undemanding test": see DIF III [171]. In other words, for the remedial operation of the section, it should not be read to require the insured to know all the facts from which a claim could arise, but only those at a higher level of generality, so long as at that level they bespeak of the possibility of a claim. That approach is inherent in acceptance of the proposition that, to engage the remedial benefit of s 40(3), it is sufficient for the insured to notify of "the problem" which may give rise to a claim or claims by entities with a particular characteristic: P & S Kauter Investments at 119 [31]; see also DIF III [170], where reference was made to the decision of the UK Court of Appeal in Euro Pools Plc v Royal & Sun Alliance Insurance Plc [2019] Lloyd's Rep IR 595, 602 [39] (Euro Pools). 2. In DIF III, the New South Wales Court of Appeal articulated the principles to be applied when construing clauses in policies analogous to s 40(3), and which extended cover to subsequently made claims, but which arise out of facts of which the insured first became aware during the policy period. At [171], the Court of Appeal observed: Those principles include: first, that the provision should be construed with a view to its commercial purpose, being to provide an extension of cover "for all claims in the future which flow from the notified circumstances"; secondly, that consistently with that purpose, a provision which refers to circumstances that "may" give rise to claims sets a "deliberately undemanding test"; thirdly, that a notification need not be limited to particular events and may be to a "problem" described in general terms if that problem of itself may give rise to a claim, and notwithstanding that the quantum and character of such claims, or the identity of claimants, may not be known at the date of notification; and fourthly, that whilst the insured necessarily has to be aware of circumstances which might reasonably be expected to produce a claim (or in this case, could reasonably be anticipated to give rise to a claim), that does not "predicate that the insured needs to know or appreciate the cause, or all the causes, of the problems which have arisen, or the consequences, or the details of the consequences, which may flow from them." 1. The reference to the fact in question being a "problem" was considered at length in Euro Pools. There, Dame Elizabeth Gloster (with whom Hamblen and Males LJJ agreed), when considering the general principles applying to the notification extension, observed (at 602 [39(iii)]): (iii) A notification need not be limited to particular events. It may extend to something as general as a regulatory warning about a class of business or a concern about work done by a former employee or prior entity. The insured may give a "can of worms" or "hornet's nest" notification; ie a notification of a problem, the exact scale and consequences of which are not known. As I said in Kidsons (at first instance) at para 76 (in a passage which was not departed from or disapproved in the Court of Appeal's decision in Kidsons at [2009] Lloyd's Rep IR 178: "At the end of day, it is in my view largely a question of interpretation and analysis of the document setting out the notification, in the context of the facts known to the assured, as to what precise circumstance or set of circumstances has in fact been notified to insurers. I am not therefore convinced that semantic cavilling over the precise formulation of the test assists the ultimate resolution of the problem. There may well be uncertainty at the time of notification as to what the precise problems or potential problems are; there well may be, whether known, or unknown, to the assured a 'hornets' nest' which may give rise to numerous types of claims of presently unknown quantum and character at the date of the notification. Whilst in principle there is no reason why such a state of affairs should not be notified as a circumstance if the assured is aware of it, in each case the extent and ambit of the notification and the claims that are covered by such notification will depend on the particular facts and terms of the notification." (Emphasis omitted). 1. She then referred to two cases which exemplified the occasion on which notice of a state of affairs which may give rise to multiple claims might be given, and that the ability to do so was not hampered by the absence of knowledge of who might make the claim or the specific damage which may have been caused. In Rothschild Assurance plc v Collyear [1999] Lloyd's Rep IR 6, it was held that it was possible to give notice of a statement by an industry regulator of its view of appropriate industry standards of practice in circumstances where the insured, who was a participant in the industry, was uncertain of the extent to which its earlier practices had complied with that standard. In that case, there was also evidence from industry wide testing of a general non-compliance with the standard expected by the regulator. These facts were held to be such as might give rise to a claim, though none of the insured's customers had complained at the time the notice was given and there were no identified contraventions of the industry standards. Rix J held that the industry prevalence of non-compliance with the regulator's expressed standard meant that it was at least possible that similar non-compliance had occurred in the insured's business. 2. Dame Gloster also referred to her previous decision in HLB Kidsons (a firm) v Lloyd's Underwriters [2009] Lloyd's Rep IR 178, which concerned notification by a firm of tax accountants as to the efficacy of various tax avoidance products which they had provided to clients. Concerns about those products had been raised by a tax manager of the business in the Edinburgh office and were supported by the opinion of a tax counsel. The Court of Appeal concluded that the tax manager's view that the implementation of certain products might be criticised and might give rise to claims, was a fact of which notification might be effectively given. 3. As to that latter point, confirmation that an expert opinion can be a "fact" for the purposes of s 40(3) can be found in the observations of Jackman J in MS Amlin Corporate Member Ltd v LU Simon Builders Pty Ltd [2023] FCA 581 [50] (MS Amlin). There, his Honour rejected the narrow approach adopted by Lee J at first instance in this matter, and preferred the reasoning that, "the opinion of an expert, such as a professional investigator, based on reasoned explanations and substantive evidence, may constitute a 'fact' for the purposes of s 40(3)". Indeed, his Honour had earlier opined (at [48]) that the "fact that an opinion has been given by a person with appropriate expertise is itself a fact", in the sense of one that might be provided to an insurer. In addition, his Honour added: In circumstances where that opinion is given by a person in a position of public authority … the publication of that opinion may well be a most important fact that might itself give rise to a claim. 1. The applicability of Jackman J's observations was challenged by the UCPT on this appeal. As a result, it is necessary to consider his Honour's decision in slightly more detail. 2. In MS Amlin, the insured conducted a construction and management business. The question before the Court was whether it had given notice to its insurer in relation to claims which were subsequently made upon it concerning the inclusion of combustible cladding in a building which it had erected. The occurrence of cladding related fires had been given some prominence in the media and several statements about that topic had been publicly made by relevant authorities, including the building authority. Whilst it is true that his Honour identified that the publication of a report by an expert might be a circumstance that might give rise to a claim, his Honour did not restrict his conclusion to that instance. He expressly accepted that an expert's opinion on a matter could itself be a fact for the purposes of s 40(3), and then noted that all that Meagher JA in P & S Kauter had rejected was the possibility that a bare belief or opinion to the effect that there might be a claim could amount to a fact. 3. The observations of Jackman J can be applied in the present case. There was no need for LKA2 to be published before it or its contents were capable of being facts which might give rise to a claim. The report revealed facts which had hitherto been kept private to those involved, and those facts, singularly or collectively, became facts which might give rise to the claims which were made. Similarly, Mr Wilson's opinion as to the existence of tortious conduct by teachers at Knox against students over a prolonged period of time, is a fact likely to give rise to claims particularly because it verifies the likelihood of the claims being made. The same can be said of his opinion that claims might be made against the school. Though the publicising of a report of the occurrence of a widely committed tort might render claims based on the underlying wrongdoing more likely than if the report were not disclosed, it is not only in that circumstance that the report and its contents are relevant facts for the purpose of s 40(3). 4. Even without Mr Wilson's view on the possibility of claims, which may not have been within the scope of his expertise, the possibility and even the likelihood of claims would have been clear to a hypothetical reasonable person. That is particularly so in light of the number of consistent detailed actual complaints, not mere rumours of diverse species of misconduct of the same genus, where there must be at least the possibility of credibility of at least some, if not all, of the complaints. That is certainly sufficient to trigger the availability of the remedy in s 40(3) and the acquisition of knowledge by the insured for the purposes of determining the scope of cover of subsequent policies. 5. The cognate issue of whether a fact is "known" was discussed by Hodgson CJ in Eq in Permanent Trustee Australia v FAI General Insurance Co Ltd (1998) 44 NSWLR 186 (Permanent Trustee v FAI), where he expressed the view that it means more than suspected or believed, and that what is required is that the matter should be the subject of a true belief held with sufficient assurance. That is not really an issue in the present case where that which was known, with its limitations and merits, was clearly set out in LKA2 and its associated materials. 6. As has been foreshadowed above, to the foregoing it can be added that the policies in this case included cover for defence costs which had the effect of expanding the nature of facts which might give rise to a claim, in the sense that, even if a suspected claim against the UCPT was thought to be not likely to succeed, the risk that the defence costs cover might be called upon would be real. It was submitted that such a conclusion would widen the notion of the concept of facts which might give rise to a claim in this case. Whilst there is much force in that submission, given the circumstances of the present matter, there is no need to consider it further. The parties' contentions as to the matters revealed by LKA2 Allianz's submissions as what LKA2 revealed 1. In its written outline on appeal, Allianz identified three matters which it submitted were relevantly revealed by LKA2. The first was the existence of historical problems at Knox going back to the 1980s of allegations of the sexual abuse of boys by multiple teachers in respect of multiple victims and, in respect of which, there was inaction or inadequate action. The second was that, although there was a known problem in relation to Mr Nisbett, the investigation revealed concerns about a number of other teachers, and it may well have been that there were even more. The third was that the existence of the sexual abuse indicated that Knox did not have effective procedures to: (i) identify staff with a sexual interest in boys; (ii) keep its students safe from staff with a sexual interest in boys; (iii) facilitate and deal appropriately with allegations of sexual misconduct by staff; or (iv) take proper action in response to proven or suspected instances of sexual misconduct by staff. 2. In response to this, the UCPT complained that the facts which Allianz alleged were revealed by LKA2 had changed on appeal, such that the precise identity of the relevant facts was a "moving feast". Whilst it is true that a consideration of the hundreds of pages of transcript in the LKA2 report itself and the associated documents revealed numerous facts which might be characterised in different ways, Allianz's submissions on this issue have remained sufficiently constant. Its current submissions are entirely consistent with those made to the primary judge. Indeed, the matters in its written outline on appeal mirror closely those articulated in its written submissions at first instance. In any case, a party on appeal is not bound by its selection of materials or evidence on which to base its argument by those adopted below, since the subject of the appeal is to address the validity of the findings under challenge. 3. The UCPT made some suggestion that it did not have sufficient time before the primary judge to respond to Allianz's submissions as to the facts revealed by LKA2. That too should be rejected. It had more than two months between receiving Allianz's written submissions and the addresses made to the primary judge to consider them. It is difficult to see what, if any, prejudice it may have suffered; it certainly did not identify any. The UCPT's submissions as to what LKA2 revealed 1. The UCPT submitted that the primary judge was correct and that LKA2 revealed no facts which might give rise to a claim against the insureds. Its position was that the revelations in LKA2 of Mr Nisbett's engaging in grooming behaviour for many years and, indeed, his being accused of the sexual abuse of boys, and of other teachers' engaging in similar behaviour, were benign in relation to the question of whether claims might be made against the school. It asserted that it was not until claims were actually made, that the content of LKA2 metamorphosed into a cornucopia of information indicating a risk of the school's being liable for claims. By this, it seemed to accept that, as at that later time, LKA2 revealed the existence of a "problem" from which claims could arise. What the material in LKA2 revealed 1. The UCPT's submissions on this issue cannot be accepted. LKA2 and its substantial associated materials exposed a number of facts or circumstances which may have given rise to claims for sexual abuse which were perpetrated by one of a number of teachers. On the issue of the potentiality for claims arising out of the facts revealed, the information was far from benign. Mr Nisbett 1. The allegations against Mr Nisbett were the most substantial and serious. In summary, the following matters were clearly revealed by the report. First, his questionable behaviour to boys at Knox had been raised over decades, going back to the 1980s. That behaviour included a number of instances of inappropriate touching of boys which constituted sexual abuse. 2. Secondly, as a teacher at the school, he had engaged in a pattern of grooming boys over many years, and that included incidents of sexual molestation. 3. Thirdly, the grooming included favouring particular boys, particularly the good-looking or vulnerable. 4. Fourthly, the grooming involved their spending long periods of time alone with them in his room, and his offering them cigarettes and talking about homosexual activities. 5. Fifthly, he engaged in sexual molestation of boys in his photography darkroom and the information suggested that this occurred on multiple occasions. 6. Sixthly, he engaged in other paedophilic-like behaviour, including on one occasion his looking into a building and waving at a boy inside who was naked. 7. Seventhly, he had close contact with boys over many years as a Boarding Master, though he had previously been removed from that position, and he had constant close contact with boys on a day-to-day basis. In the light of the evidence of his proclivities, the fact that for an extended period he was allowed to remain in that position where he was able to interact with and groom boys, renders it reasonably open that there may be more victims of his conduct than were known of at the time LKA2 was provided. Indeed, that is presaged by Mr Wilson's opinion to that effect. 8. Eighthly, Mr Nisbett's known behaviour was indicative of possible further grooming conduct and sexual activity. As a whole, the evidence indicated a pattern of his behaviour of paedophilic conduct extending over a number of years. Mr Wilson mentioned the risk that there were other students whom had similarly been groomed and molested, and the risk that they would one day litigate their grievances. 9. Ninthly, several persons, including current and former headmasters, were concerned that litigation would arise as a result of Mr Nisbett's conduct. That risk of litigation was made evident in the Supplementary Risk Analysis which specifically mentioned that the school may be at risk from as-yet unmade claims of students or ex-students. 10. These matters, taken together or in some combination, caused a substantial risk that the victims would seek redress from the school at some time. The years of consistent grooming behaviour was indicative that more serious behaviour is likely to have occurred, in the sense that, as that behaviour was persistent over time, it is likely that it will have intensified. Necessarily, the conduct will have been perpetrated upon many persons who were likely to no longer be at the school, such that direct evidence of what had occurred would be difficult to locate. 11. When the occurrences of actual sexual abuse are added to the evidence of persistent grooming behaviour, the risk of claims against the school increased substantially. Once reasonable evidence of sexual abuse was uncovered, it must have been difficult to avoid the conclusion that litigation was at least possible. It also shows that Mr Nisbett's persistent grooming conduct did, in fact, intensify to the level of molestation which, in turn, leads to the expectation that further as-yet unmade claims may well emerge. 12. In summary, with great respect to those of the contrary view, it can be comfortably concluded that LKA2 revealed facts that rendered it likely or at least very possible that claims would be made by Mr Nisbett's victims of the sexual abuse, and that those claims could be made against those who had managerial or operational control of the school. Other teachers 1. LKA2 also revealed a real risk that other teachers at the school had similarly engaged in various degrees of inappropriate sexual behaviour towards students. Specifically, that included Mr Vance and Mr Fotis, with less direct references made to others such as Mr Stewart and the person referred to as AP15. Allegations in relation to them differ in degree, and there is substantially more in relation to Mr Vance. Some attempt was made to rely upon allegations or rumours against a Mr Treloar, but that exemplifies where there may have been insufficient information for any relevant risk to be disclosed in relation to him. 2. A former Headmaster had informed Mr Wilson that he had removed Mr Vance and Mr Fotis as a result of inappropriate behaviour of a sexual nature towards boys at the school. In the case of Mr Vance, it was as a result of a complaint from a boy alleging that he had been under the Chapel smoking with Mr Vance who had touched him inappropriately. The evidence included statements from former students that Mr Vance had admitted to them that he had engaged in sexual activities and had sexual relationships with other boys at the school. It also disclosed that it was Mr Vance's regular practice to take boys to a secluded place in the school to smoke cigarettes with them, which conformed to the definition of the first stage of grooming. A level of concern about his behaviour was held by a number of staff at the school, including the teacher, PTPC39, and the boarding house master, PTPC4. 3. Mr Fotis was discharged from the school as a result of an incident in the junior boarding house. A former Director of the Boarding Houses indicated that there were question marks over his involvement with boys, and a former Headmaster also held concerns about him. In the context of the discussion, it can be assumed that the cause of his sudden removal was of some sort of sexual impropriety towards one of the students, though the strength of the evidence against him seems to have been less compelling than that against Mr Vance. 4. The evidence against Mr Stewart largely consisted of a threatened complaint by a former student and his assertion that he intended to sue to the school in relation to his being sexually molested by Mr Stewart. The allegations were contained in a file note in the materials attached to LKA2. The date on which the file note was made is not clear though it appears to have been in the mid-1990s. 5. That same document also referred to another teacher, AP15, who was alleged to have been having a sexual relationship with a boy at the school. 6. It is relevant that the complaints or allegations against Mr Stewart and AP15 had been made some years prior to Mr Wilson's investigation and, as at the time of the completion of LKA2, no claim had been made. Whilst, on the one hand, this lessens the significance of the information concerning them, on the other, part of the context in which LKA2 was delivered was that some years previously, on 2 March 2000 in the course of the annual insurance sweeps, the then Headmaster provided a notification of the names of Mr Vance, Mr Fotis and AP15 as persons who might give rise to possible claims against the school. There is little known about why the notification was given, but it is not unduly speculative to conclude that it was in relation to their conduct towards boys at the school. The point is the recognition in similar circumstances of the possibility of a claim. 7. Although LKA2 was directed at Mr Nisbett's conduct, it also addressed the very serious topic of any culture of the sexual abuse of children at the school and, in the context of the relationship between the insured and the insurer, that naturally speaks of a potential for future claims. It is no small matter that an investigation into allegations against one teacher also attracted allegations and concerns against several others, especially where the additional allegations went beyond mere rumour. It is also far from irrelevant that such allegations surfaced despite there being any direct inquiry into those persons. Ultimately, it is indicative of the existence of a prior culture of sexual abuse at the school which included the circumstance that when allegations of sexual abuse surfaced, they were not decisively dealt with and, in particular, there was an absence of police involvement. The school's response to such claims was apparently not designed to ascertain the true nature and extent of the problem or to prevent its reoccurrence. This conclusion is supported by its response to the receipt of LKA2 itself. No step was taken to involve the police despite the seriousness of the allegations, and no further investigation was pursued in relation to the conduct of the other teachers mentioned in LKA2. That latter issue is disquieting given that some of the allegations against those other teachers were of a more serious nature than those made against Mr Nisbett when the second investigation was instigated. 8. Taken together, the matters emerging from LKA2, or some of them in combination, indicated that Knox had employed a number of teachers who, over an extended number of years, had engaged in grooming and/or the sexual abuse of students. The evidence relating to the serious conduct of Mr Nisbett was by far the strongest and provided the most substantive indicators of the problem. Whilst the evidence was less clear in relation to other teachers, there were strong indications that they too were engaged in similar behaviour and no fulsome investigation into them had occurred. As Mr Wilson observed in LKA2, the material disclosed that Mr Nisbett's conduct went relatively unchecked for many years and that indicated that the school's environment was one in which the sexual abuse of school boys might develop and proliferate. Existence of a problem of the sexual abuse of children at the school 1. It follows that LKA2 revealed the existence of this "problem", "hornets' nest", or "can of worms" going back to the 1980s. Though Mr Nisbett's conduct was the report's focus, it incidentally revealed a management approach at the school which included a persistent failure to take appropriate action in relation to information about the possible sexual abuse of boys. That permitted an environment to develop where predation on students by a number of teachers could and did occur. The evidence against teachers other than Mr Nisbett of grooming and of actual inappropriate sexual conduct towards students cannot be set to one side. Whilst that which was then available against them was minor relative to that against Mr Nisbett, that is not surprising given that the investigation was not directed to them. Nevertheless, the report revealed the problem of the sexual abuse of boys at the school over a number of years by a number of teachers, and that the full extent of it had not been investigated and was not known. From that, it is possible to extrapolate that for some significant time the school had inadequate procedures in place to protect students from staff who had a sexual interest in boys or to deal with staff who were thought to be so inclined. This conclusion largely accords with Allianz's submissions as to the revelatory nature of LKA2. 2. By way of confirmation of the above, one might consider the position of an insurer who might have been approached by the UCA to provide insurance cover for the 2005/2006 year and to whom LKA2 was provided. Though some different considerations might apply, it is difficult to conclude other than that the insurer would exclude cover for claims by former students at Knox in relation to sexual abuse perpetrated upon them by teachers. That was the clear risk which LKA2 indicated. 3. To the same effect, if, promptly on its receipt LKA2 was given to Allianz by way of notification under s 40(3), it would have exposed a problem or hornets' nest, being that of the sexual assault of students by teachers at Knox over a number of years. Had that occurred, and putting aside the policy's sub-limits for sexual abuse or any issue of non-disclosure, the school could have claimed cover for all subsequent claims by former students. All of this fortifies the position that LKA2 clearly indicated the serious possibility of claims based on the conduct it disclosed regardless of the identity of the teacher involved. Disagreement with the primary judge 1. The foregoing conflicts with the conclusion of the learned primary judge (at [460]) that the facts contained in LKA2 and its accompanying materials evidenced only a bare possibility of a claim as a result of the absence of any contemporaneous complaint. Whilst his Honour was cognisant of the absence of any complaint of sexual abuse against Mr Nisbett at the time, a lesser complaint had been made. Though, as at early 2004, that complaint did not expressly articulate the occurrence of sexual abuse, the material then available to the Headmaster, Mr Weeks, was sufficient to cause him to commission the second investigation in relation to the possibility that it had occurred. 2. The primary judge opined that the prospect of any person's coming forward with a claim against teachers of Knox after two decades was remote. On the evidence, that was not, however, the opinion of Mr Wilson who, in his risk assessment, noted the existing risk to the school of as yet unmade claims by former students. His view echoed the concerns of one of the school's former Headmasters and a former teacher. It is true that the factor of numerous claims of historical sex abuse by former students which were made against the school from 2006 does not necessarily predicate the likelihood, as at June 2004, that they would be made. However, that is not the question, which was whether the facts in LKA2 rendered it objectively possible that they would be, and for the reasons given, the necessary answer is in the affirmative. The absence of any allegations of sexual abuse as at the time of the commissioning of the LKA2 report did not significantly diminish the chances of them and, indeed, that factor is hardly relevant, if at all. It is a matter of human experience and common knowledge that feelings of embarrassment or shame that may be felt by victims of sexual abuse (which, it should be said, are unwarranted) tend to tamper any motivation to bring a claim, at least until others are made. But, as they mature and develop, their perspective of the seriousness of the conduct may emerge. All this has the consequence that the making of claims is often delayed for some time, though not eliminated from a very real possibility. 3. It may be that attitudes to child abuse have changed over time, but there is nothing to suggest that in 2003/2004, institutions such as Knox were not aware of the importance of reporting it, including to their insurers. So much was apparent from the actions of Knox in relation to the complaint by TPC1's mother against Mr Nisbett, though it contained no express allegation of sexual assault. Indeed, the UCA's sexual abuse reporting guidelines from 1999 and following reveal that notification of such matters was a matter of great importance to it and the school. That was well before LKA2 was produced. In the totality of these circumstances, it cannot be found that the facts in LKA2 were more likely to presage of the potential for claims against the school in 2007 than in 2004 by reason of changing attitudes to child sexual abuse. 4. It should be added that it is true that the learned primary judge was not bound by the opinion of these other parties, but the evidence and common experience strongly supports their view, and the fact that they had it is at least consistent with a possible conclusion of experienced persons. The matters revealed were not irrelevant rumour 1. The UCPT submits that LKA2 contained mere rumour or innuendo which had remained dormant for two decades until they were revealed by the investigations, and was therefore insufficient to reveal any relevant fact. From what has been said above, that cannot be accepted. LKA2 and its associated transcripts and materials contained a significant array of evidence which supported Mr Wilson's conclusions, and the facts on which Allianz relied. Some was more direct in the form of firsthand observations of actual conduct, some was of reports received from boys who were subject to it, some was hearsay, and some was evidence of widely repeated rumour in relation to the conduct. Whilst it is true that the evidence obtained from several sources was hearsay, in the totality of the context that included direct allegations that strongly corroborate it as to the existence of the culture that was consistent with the allegations themselves, that does not necessarily deny it any evidential value in relation to the existence of relevant facts. 2. Mr Wilson felt that there was sufficient evidence for him, on the balance of probabilities, that Mr Nisbett had engaged in sexual misconduct in relation to boys at the school. There was also evidence of other conduct which, although it did not reach the level of establishing the occurrence of events on the balance of probabilities, did affirm its occurrence to some extent. 3. The UCPT relied on the existence of evidence that some persons interviewed by Mr Wilson were supportive of Mr Nisbett and were not prepared to accept or acknowledge the allegations against him. That is a relevant consideration, but their personal evaluation of a person who had good reason to deceive them, is of little weight in the face of the substantive evidence to the contrary. Their naivety, whether deliberate or otherwise, did not diminish its strength. The facts shown might give rise to a claim 1. The requirement in s 40(3) that the fact is one "which might give rise to a claim" sets the bar at a relatively low level, being an assessment that must be objective, that is, it is to be reasonably regarded by a reasonable person in the insured's position as having a real risk of a claim: P & S Kauter Investments at 120 [34] – [35]. 2. Despite the UCPT's submissions as to the suggested lack of veracity of the evidence supporting the facts derived from LKA2, as they emerged those facts were sufficiently cogent to meet the description in s 40(3). The report was commissioned in the context of the UCA's being particularly aware of the risk of sexual abuse within its organisations. Its reporting guidelines specifically highlighted that risk as one requiring vigilance in detecting and reporting. The facts which LKA2 revealed plainly gave rise to the objective risk of claims for damages in relation to sexual abuse. The evidence that some boys had been abused by Mr Nisbett or Mr Vance or others is, of itself, sufficient. However, the fact that there had been a long period during which Mr Nisbett and others had been engaging in grooming behaviour which was unchecked by any suitable system to prevent its occurrence, gives rise to a real risk that sexual abuse of a number of students will have occurred and that claims and actions will be forthcoming. 3. Though LKA2 did not reveal the identity of the many victims, the authorities to which reference has been made show that such knowledge is not a requirement for s 40(3). It was sufficient that it revealed a "problem" or "hornets' nest" over an extended period. The characteristics of persons who were likely to make claims were students at the school from the 1980s onwards. In the light of the combined evidence, its quality overall could not be dismissed in such a cavaliere fashion as the school did, and to have done so at the time would have been an exercise of judgement as to the likelihood of claims of a most courageous kind. Conclusion with respect to the facts revealed 1. At the time of its presentation to the school and others, LKA2 and the associated materials sufficiently revealed facts which might have been reported to Allianz to trigger s 40(3). They revealed many years of paedophilic conduct by Mr Nisbett and other teachers, the persistent grooming and sexual abuse of boys, and the existence of a school culture where that could occur. They were all matters which might give rise to claims against the school. It was not in dispute that no notification was given at the time or within the prescribed period. Issue 2 – Attribution of knowledge 1. The second issue is whether the knowledge of Mr Weeks, as the then Headmaster of Knox, or of some other person or persons, of the facts revealed by LKA2 can be attributed to the UCPT for the purposes of s 40(3). As will be discussed subsequently, similar principles apply to the attribution of knowledge for the purposes of Exclusion 7(c). 2. The major point in dispute was whether the UCPT was, or is taken have become, aware of the contents of LKA2 in May or June 2004, or at some other time. Its resolution turns on the identity of the person or persons whose knowledge can be attributed to the UCPT. Allianz's main submission was that the UCPT was aware of LKA2 either in 2004 or, alternatively, by 30 January 2006 at the latest, through the knowledge of the Headmaster of Knox or of the members of the School Council. 3. The UCPT's submissions on this issue were somewhat obscure. That lack of clarity was emphasised by the vagaries surrounding its position within the UCA and its role, or responsibility, if any, in relation to the management or administration of Knox. This was further exacerbated by the uncertainty surrounding the legal efficacy and effect of the UCPT's assumption of responsibility for any liability arising from any litigation brought against the school or School Council. Nevertheless, a central tenet of its submissions is that its right to indemnification under the polices in respect of claims by former students of Knox relating to their suffering sexual abuse whilst at the school, is unaffected by the pre-policy knowledge of the school's Headmaster or members of the School Council of the existence of facts from which those claims arose, and that such knowledge did not adversely affect its right to the benefit of s 40(3) since it, itself, had no such knowledge. This position was maintained though it was the inaction of the members of the School Council and Headmasters which allowed the damage to the students, and it was their liability in respect of which it sought indemnity. 4. That position needs only to be so articulated for its problematic character to reveal itself. In particular, if its position were maintainable it would mean that, by assuming responsibility for the liabilities of entities and individuals within the UCA to third parties, it could immunise those insureds in respect of their obligations as insureds to Allianz in relation to those liabilities by invocation of its own ignorance of facts despite the knowledge of those who were directly liable. The relevant repository of knowledge for insurance purposes 1. There was also some difficulty in identifying precisely whom the UCPT regarded as the relevant possessor of relevant knowledge for the purposes of the policies. At times it submitted that it was the relevant repository, and, on other occasions, it was suggested that it was the General Secretary of the Synod, Mr Oldmeadow. The position was never made clear and it is apparent that it preferred to rely on Allianz's inability to identify the relevant person as being a failure by it to discharge the onus on this issue. 2. Ultimately, the fulcrum of its submission was that it was the repository of relevant knowledge and that it could be sued as the defendant in respect of the claims by former students against the school and that it accepted responsibility to be liable for any claim. From that foundation, it submitted that, in respect of the majority of claims made until 2009, as it had no relevant knowledge of LKA2, the facts contained in it were irrelevant to the question of the indemnity to which it was entitled under the Allianz policies, including whether any policies might thereafter be extended by reason of s 40(3). This submission proceeded upon the basis that, although it was not, in fact, liable for the tortious conduct committed in the school's operation, it was the relevant defendant in respect of any claim against Knox which, though insured, was not a legal entity. 3. One obvious difficulty with this approach is that, if the UCPT were merely put forward by the UCA as a convenient or nominal defendant, it would not be entitled to indemnification under any of the policies on its own behalf, because there would have been no sums for which it would have become legally liable to pay as a result of any claim, within the scope of the insuring clause of its own cover. A loss arising from any liability for which it has voluntarily assumed responsibility is not a loss recoverable under the policy. The facts relating to the acquisition of knowledge 1. At this point it is appropriate to consider the structure of the UCA and its entities, as well as the source of the powers of management and administration of Knox, and the identity of those who exercised them. The structure of the UCA and its business operations 1. The UCA is an unincorporated association formed in 1977 upon the union of the Presbyterian Church of Australia, the Methodist Church of Australasia, and the Congregational Union of Australia. Pursuant to s 6 of the Uniting Church in Australia Act 1977 (NSW) (UCA Act), those churches were empowered to unite in accordance with the Basis of Union contained in Sch 2 of that Act. The Assembly and the Synods 1. The Assembly, which is defined in cl 15(e) of the Basis of Union, is the Church's national governing body. It is constituted by persons appointed by the several Synods and Presbyteries. By ss 9 and 10 of the UCA Act, the Assembly is empowered to amend and repeal the UCA Constitution, or adopt a new constitution, consistent with the Basis of Union. By cl 38 of the UCA Constitution, it has: … determining responsibility in matters of doctrine, worship, government and discipline, including the promotion of the church's mission, the establishment of standards for theological education and the reception of Ministers from other communions, and is empowered to make final decisions on all matters committed to it by this Constitution. 1. In general terms, it provides guidance and determinations on matters affecting the Church on the tasks and authority to be exercised by other entities. 2. The Assembly is required to have a President and a General Secretary. 3. Beneath the Assembly are the Synods which are regional councils, generally relating to the church in each of the States or Territories. The members of those Synods are appointed by the Presbyteries, Elders'/Leaders' Meetings, or congregations as determined by the Assembly. Each Synod has such powers and authorities as are delegated to them by the Assembly: cl 13(d) of the Basis of Union. 4. Clause 35 of the UCA Constitution provides that each Synod is required to appoint a Secretary, and that is reflected in the UCA's by-laws which are discussed below. 5. The Synods operate through a standing committee, a General Secretary and various boards which are responsible for the administration of the UCA's mission. The General Secretary of the Synod (sometimes referred to as the "Secretary to the Synod": by-law N3.24.1) is appointed pursuant to by-law N3.24.2. They work with the Synod's Moderator, even though the latter's role is not one involving administration: see cl 3.5.17 of the Uniting Church in Australia Regulations (UCA Regulations). The General Secretary acts in a Chief Executive Officer's role and the Executive Directors of the several Boards are accountable to the General Secretary: cl 2.5.15 of the UCA Regulations. 6. Pursuant to Div 5 of the UCA Constitution, the beneficial ownership of UCA property vests in the Church, though each Synod shall create a body corporate (referred to as the Synod Property Trust) which shall hold legal title to all property. By cl 52, property vested in the Trust shall be "held, managed and dealt with in accordance with the rules, regulations, by-laws and resolutions made by or under the authority of the Assembly in that regard". The creation and operation of the UCA Property Trusts 1. The Uniting Church Property Trust for the Synod in New South Wales (which is the respondent in this case and referred to in these reasons as the UCPT), was established by s 12(1) of the UCA Act. Similar property trusts were created by reciprocal enactments in the other Australian states. 2. Pursuant to s 13 of the UCA Act, the UCPT is a statutory corporation, with power to: (a) acquire, hold, deal with and dispose of property of any kind, (b) mortgage, charge or otherwise encumber any of its property, or (c) borrow money for the purposes of the Trust. 1. By s 13(3), the Trust is to "hold, manage, administer and otherwise deal with trust property in accordance with the regulations, directions and resolutions of the Assembly". 2. The learned primary judge held (at [18]) that the UCPT, and its equivalents, are held out as the legal entities to sue, or be sued, on behalf of the Synods or any agency of the UCA, or in relation to trust property. That was apparently by reference to cl 4.9.1 of the UCA Regulations, which provided: 4.9.1 The Property Trust in the State or Territory where proceedings are being taken may sue or be sued in its name on behalf of the Church or any agency of the Church or in relation to trust property. 1. As it has been indicated, cl 4.9.1 is important to the resolution of this case as it possibly permits claimants against the Church in any of its iterations or agencies, to commence and pursue litigation against the UCPT, regardless of whether or not the UCPT is the entity which is actually liable to the claimant. It attempts to create for each of the UCA's Synods a "nominal defendant" which can assume responsibility for the liabilities of the Church across the entirety of the organisation. 2. In relation to the issue of how, precisely, the UCPT became liable for the claims made by the former students, Mr Williams SC submitted that the UCA's Constitution had "statutory recognition" or is referred to "in the Act", the latter being a reference to the UCA Act. That submission was apparently intended to establish that the UCPT was legally responsible and liable for any wrongful acts of any of the entities or persons who were part of the UCA's operations. If that was what was intended to be conveyed, it was wrong. It is true that the UCA's Constitution is mentioned in the UCA Act, but on no view could it be said that it is given recognition in the sense of according its terms the force of law in respect of the rights of third parties. 3. The membership of the UCPT is provided for by s 12 of the UCA Act and includes the Moderator of the Synod, the Secretary of the Synod, the Property Officer of the Synod and the five other persons appointed by the Synod. There was nothing in the evidence before the Court which identified the members of the UCPT at the relevant times or who, if anyone, was its directing mind or will for any purpose whatsoever. As has been indicated above, that is curious in a case where its knowledge is a pivotal issue. 4. There was also an absence of material before the Court as to the operational activities of the UCPT. It may be a function of the manner in which the trial occurred — namely, the absence of any evidence from any person who was able to give an explanation of how the UCPT worked — that its relevant managerial and administrative arrangements remained unestablished. On the other hand, there was little, if anything, to support the contention that it was part of the managerial or administrative apparatus of the UCA. The only evidence relevant to its activities indicated that its role was to hold and manage the Synod's property. Allianz submitted that there was no factual foundation for the primary judge's conclusion (at [18]) that it "supplement[s] the administrative functions of the Assembly and the Synods". That submission should be upheld, to the extent that the finding suggests that it was, itself, involved in any conduct which might have rendered it legally liable for the claims in respect of which indemnity is sought in this matter. Operation of the Church activities 1. The UCA operates a range of businesses, which it refers to as "institutions", across a number of areas including, but not limited to, aged care, medicine, education, childcare and hospitality. To a large degree its management and operation of them is conducted through committees, councils, boards and other groups under the supervision of the Synods. 2. By cl 4.2.3 of the UCA Regulations, the Synod was required to appoint the members of a Property Board, which, by cl 4.2.1, was required to advise the Synod on policy relating to property within the bounds of the Synod, and to implement them as the Synod determined. A property committee was also established by each of the Presbyteries, for the purposes of making submissions to the Synod Property Board about the use of property within the bounds of the Presbytery: see cl 4.2.2 of the UCA Regulations. 3. The Synod also operated a discrete Board of Education which was given responsibility for the UCA educational facilities within its bounds. Co-ordinately, the constitution of Knox made provision for the Board of Education to nominate to the Synod persons to serve on the School Council of the UCA schools within its Synod's area. 4. On the evidence, the precise nature of any involvement of the Board of Education was also vague. In some correspondence from the solicitors acting for both the school and Allianz in relation to claims against Knox, the relationship between the Board and the school is referred to by the author, Ms Blacker, in terms that the "Board of Education of the Uniting Church in Australia, operates the Knox Grammar School NSW". Similarly, in an agreement between TPC1 and the UCPT for the settlement of TPC1's claim, it was stated that, "[t]he Synod of the Respondent operates Knox Grammar School (School). The Synod of the Respondent is subject to the authority of the Board of Education of the Uniting Church of Australia (Board)". Similar statements are made in later letters of advice from Gadens to Allianz, including one in relation to TPC4 dated 14 December 2010, though it is also stated there that the school was governed by the School Council, and that the responsibility for implementing policy and management of the school was delegated by the School Council to the Headmaster. These latter statements are likely to reflect an accurate description of the position. 5. Importantly, there is nothing whatsoever in the evidence which suggests that the UCPT had any obligation or responsibility for the management, administration or operation of the school. 6. In a submission for insurance in 1999 to MMI (subsequently Allianz), through Marsh, some 38 schools were identified as being conducted by the UCA across Australia. In addition, it was said to operate a wide range of other businesses. 7. As mentioned, it was also regulated by certain by-laws which it adopted from time to time. The materials before the Court included a copy of some by-laws as at 12 August 2004 which were contained in a UCA "Leadership Charter" dated September 2013 (hereinafter, the "Synod by-laws"). In the absence of anything to the contrary, it might be assumed that those in force at the times relevant to these proceedings were substantially the same. They divided the Church's operations into four "Divisions" being, Mission, Social Responsibility, Education, Finance and Property. They required the Synods to establish a board for each division to function on behalf of the Synod and be responsible to it: cl N3.31.1 Synod by-laws. 8. The areas of responsibility for the Board of Finance and Property in relation to finance included (as set out by the primary judge at [42]): (1) implementing and supervising Assembly Regulations and Synod by-laws relating to finance and funds: cl N3.34.1B(i); (2) gathering information from Synod boards and agencies and the Assembly to the extent necessary to enable the Synod budget committee to determine the Synod budget: cl N3.34.1B(ii); (3) administering the decisions of the Synod budget committee: cl N3.34.1B(iii); (4) exercising the general oversight and management of such Synod funds as may be determined by Synod, including the insurance fund: cl N3.34.1B(iv); and (5) in conjunction with the Synod property trust, managing and administering all property which vests or has vested in the UCPT and which is not the responsibility of any parish, presbytery, board or other body of the Church under or pursuant to any regulation or by-law or decision of the Synod: cl N3.34.1B(viii). 1. The obligations of the Board of Finance and Property in relation to property were, at least, equally wide ranging: see cl N3.34.1A Synod by-laws. Indeed, so wide were they that it is difficult to identify any aspect of the use and management of the property of the UCA within the Synod that might be undertaken by any other entity, especially the UCPT. 2. The membership of the Board of Finance and Property was to comprise, amongst others, the members of the UCPT, the Moderator, the General Secretary of the Synod, the Property Officer of the Synod (the Executive Director of the Board), and the five other persons appointed by the Synod: cl N3.31.7B Synod by-laws. 3. The evidence suggests that the name of the Board of Finance and Property was subsequently changed to "Uniting Resources". It was said in the UCPT's submissions to the primary judge that Uniting Resources is the "institution established for the Finance and Property Ministry Area of the Synod, and is to carry out the Objects, Functions and Responsibilities listed in the Synod By-Laws on behalf of the Uniting Church in Australia, Synod of New South Wales and the ACT" (referring to cl 8.0.1 of the Synod by-laws). It was also submitted that, under the Synod by-laws, Uniting Resources has obligations to make recommendations to the Synod in relation to a number of matters, including insurance, and pursuant to cl 8.2.5, Uniting Resources is responsible for, inter alia, establishing and maintaining policies and procedures for insurance on behalf of Presbyteries, Church Councils and other bodies within the bounds of the Synod. 4. The primary judge found (at [19], [667]) that Uniting Resources also supplements the administrative functions of the Assembly and Synod and that it is and was the entity within the UCA with immediate responsibility for obtaining insurance on behalf of the UCA. This finding was challenged by Allianz. 5. There was, unfortunately, very little evidence as to how Uniting Resources was established and pursuant to what powers. The UCPT appears to submit that it was created pursuant to the established by-laws of the Synod, though no such by-laws appear to be in the materials on appeal. Earlier versions of the Synod by-laws were included, but they do not mention Uniting Resources. In the course of the appeal, Mr Williams SC referred to Uniting Resources as the "insurance arm" of the Church or that it carried out the insurance functions. However that may be, no submission was made as to how it was constituted or whether it, or the people who constituted it, were significant to the question of whose knowledge was relevant for the purposes of s 40(3) or Exclusion 7(c). On the contrary, its nature remained enigmatic at best, and it was certainly not submitted that the knowledge of any particular person involved with it was more relevant than the knowledge of those involved with the UCPT. Whilst it had a role to play in managing insurance matters, including maintaining a fund for the purpose of paying deductibles, on the evidence its actual role in obtaining insurance was vague at best. Overall, its role in relation to any of the matters in issue seemed to be illusory as is, perhaps, suggested by the fact that it was not an entity or organisation mentioned in the UCPT's concise statement in this matter. Knox Grammar School 1. Knox is one of the UCA's businesses operated for the NSW Synod, and was governed by its constitution as amended from time to time. It has no separate existence in law. 2. From 1998, cl 5 of its constitution provided that ultimate control of it was vested in the Synod. By cl 6, its management was to be carried out by a School Council, consisting of between 12 and 15 persons, appointed by the Synod and having been nominated by the Synod's Board of Education. The School Council was not an incorporated body, but rather an unincorporated association of individuals who, by cl 23 of the constitution, were provided with an indemnity "against liability incurred in the performance of their duties as provided by the Regulations and By-Laws of the Church in force from time to time". In these reasons the expression, "School Council", is used for the members of the Council as they were from time-to-time. 3. Clause 10 of the constitution sets out the duties of the School Council in the following manner: 10. The Council shall be responsible and shall make provision for all matters pertaining to the management of the School including: (a) carrying out and compliance with the policies, directions and By-Laws of the Synod, the Regulations of the Church, and the requirements of any Governmental body having authority in the matter, (b) the engagement, dismissal and supervision of staff; (c) the supervision of the activities of the School; (d) the proper and efficient management of the School; (e) the care and preservation of the property in which the School is conducted and of property otherwise related to the activities of the School; (f) the selection and admission of students; (g) the furnishing of reports at least quarterly to the Board of Education of the Synod; (h) the furnishing of the annual report, statement of accounts and budget referred to in Clause 15 hereof to the Synod. 1. By cl 11(a), the Council was entitled to appoint, suspend and dismiss a Headmaster. By cl 11(b) the Headmaster was "responsible to the Council for the general administration and daily operation of the School and for the implementation of the decisions of the Council". 2. Clause 4 made provision for the holding of the school property as follows: All real and personal property shall be held and managed in accordance with the provisions of the Uniting Church in Australia Act 1977 (NSW), and the Regulations and By-Laws made pursuant thereto and the provisions of any Act for the time being amending or replacing the same. 1. That is in keeping with the provisions of the UCA Act and the UCA Regulations. In furtherance of that arrangement, during the relevant period, the UCPT was the owner of the business name "Knox Grammar School", and it held an ABN in the name of the "UCPT trading as Knox Grammar School". It collected and remitted goods and services tax in relation to the school's operations. Despite these matters, there was nothing to suggest or imply that it engaged in the business of operating the school. 2. It is somewhat relevant that cl 6(d) of the constitution also provided for the Synod to appoint the General Secretary of the Board of Education to be a member of the School Council, though apparently in an ex officio position. Mr Oldmeadow was appointed by the Synod to the School Council in that capacity, a position which he held between 2001 and 2007. It seems that at other times it was a Mr James Mein who was the Synod's ex officio appointee. The School Council's/Headmaster's responsibility for the sexual abuse of former students 1. The evidence from which the Court might draw appropriate inferences establishes that the members of the School Council, at around the times of the perpetration of offences, were presumptively liable for the occurrence of that conduct, by reason of their failure to put in place a system to prevent the possibility of such a well-known risk. Their obligations under cl 10 make it plain that they had the power and responsibility for the overall management and administration of the school, including ensuring compliance with all relevant regulations and the application of all suitable precautions. It is difficult to accept how this sexual abuse of boys over a substantial period could have occurred had the School Council diligently attended to its obligations. The policies, by-laws and directions were not in evidence, but it can be inferred that it was an essential part of the duties imposed to ensure, so far as reasonably possible, that adequate steps be taken to prevent harm of such a nature to the students. There was no submission to the contrary. 2. Accordingly, the School Council members could well have been liable for their conduct, as was discussed in Trustees of the Roman Catholic Church for the Archdiocese of Sydney v Ellis (2007) 70 NSWLR 565, 577 [49], 577 [51], 604 [200], 604 [201]. To the extent to which liability attached to others by reason of the actions of the abusers, the structure of control also indicates that the members of the School Council would be vicariously liable for the acts of the teachers or masters. 3. Although it is an inference drawn from incomplete evidence, and unfortunate as it may be to say, it may be that the relevant Headmasters would also have incurred liability for having failed to prevent the damage sustained by the former pupils. Had they properly administered the school and its daily operation, it is unlikely that the abuse would have occurred so recurrently and freely or, perhaps, not at all. 4. It appears that consecutive School Councils and Headmasters fell well short of an appropriate standard in the management of Knox to the extent it concerned the protection of students from molestation by the employed teachers. It should be emphasised that it is not intended to ascribe liability necessarily to any particular individuals. There may be good reason why particular persons may not be liable for the harm to any particular student but, generally the persons holding those positions would, in the ordinary course, be legally responsible for the precautions that should have prevented the harm. 5. It is worth remarking that in certain letters of advice to Allianz and the UCA from Gadens in respect of claims made by former students, such as that of 18 December 2008 in relation to TPC1, the discussion of liability is directed to the acts or omissions of the "School", which is referred to as "Knox Grammar School". The issue addressed was whether the "School" breached its duty of care to the claimant or was vicariously liable for the acts of the teacher or master involved. It involved, inter alia, such issues of whether it took adequate precautions to protect the pupil from the wrongful conduct by third parties, including teachers. Such measures should have included the institution of systems to provide early warnings of offenders, deterring misconduct, prohibiting teachers from seeing pupils alone and without the presence of other teachers, and encouraging the raising of complaints about aberrant or unusual behaviour. Following a consideration of the policies which were in place at the relevant times relating to prevention, Gadens' advice was that the "school" was likely to be found liable in negligence in relation to the claims made by TPC1. Though the named respondent in any action was to be the UCPT, the advice implicitly recognised that the negligence involved was, relevantly, that of the School Council. Its negligence arose from its failure to use the School Council's powers and, the headmasters aside, there was no other entity, incorporated or not, which had the relevant authority and power. The UCPT had no obvious primary liability for the damage suffered by students 1. There is nothing in the material to suggest that the UCPT had any direct liability for the misconduct of the teachers at Knox. It had no power to regulate or control the activities or conduct of teachers or masters, and nor was there anything to suggest that it had any ability to put in place any procedures, rules or regulations which might have protected the boys at the school. It had neither managerial nor administrative control over the school or the activities which occurred there, which might found an allegation that it had breached a duty, either at common law, in equity, or in contract, owed to the students, as a result of which the sexual abuse occurred or was allowed to occur. It was not in the position to do or to omit from doing anything which caused damage to any claimant, and there is nothing in the voluminous material before the Court to suggest otherwise. 2. Although it was the owner of the property on which the school operated and possibly owned the assets used in it, that is insufficient for it to owe duties of care of this nature to the pupils. It might be possible to say that it owned the business of the school, but nothing suggests that it conducted the business in a relevant way that would make it liable for the actions of those who actually operated it. 3. The true position is that the UCPT has acted merely as a nominal defendant in relation to actions brought against the UCA or any of its entities as contemplated by cl 4.9.1 of the UCA Regulations. Rather than have the members of the School Council or the Headmasters be named as individual defendants in any litigation, it is apparent that the UCPT was habitually put forward as the defendant against which any action might be brought. So much is apparent from the admissions which it made in the several defences which it has filed in the litigation pursued by former students, some of which it has settled, entered into deeds to settle, or paid or contributed to the settlement sums. It also sought indemnity from Allianz in relation to those claims and to whom Allianz has provided indemnity, to a point. 4. During the appeal, counsel for the UCPT struggled to explain how it was relevantly liable to the former students who had been sexually abused, though he ultimately acknowledged that it was an "assumption" of liability, rather than its imposition by reason of an actionable wrong. Presumably, that was in reliance on cl 4.9.1 of the UCA Regulations. If so, that merely enables it to assume responsibility voluntarily for any liability arising in respect of the claims made against others within the UCA organisation. It does not compel a party to proceed against it if others are, in fact, liable for that party's losses. Moreover, the fact that claimants may be invited to sue the UCPT and do so, obviously does not change the rights under the policies of the insureds who committed the wrongs from which liability arises, nor does it extend the cover of the entity which is sued. 5. That lack of synchronicity is consistent with Allianz's submissions to the primary judge in relation to the issue of the attribution of knowledge. As appears in his Honour's reasons (at [600]), Mr Potts SC, senior counsel for Allianz, made the following submission in the course of oral argument: Your Honour understands, we don't as a primary case accept that there is any relevant distinction between Knox Grammar School and UCPT. We say that they are effectively to be equated with one another for this purpose. We have UCPT suing us for indemnity for liabilities incurred by Knox Grammar School in operating as a school. Knox Grammar School is a registered business name of UCPT. UCPT has an ABN in the name of Knox Grammar School, trading as Knox Grammar School … The position is no different than if I were a trustee for your Honour and Mr Williams and I decided to invest in Mr Conde's bakery, and I said, "Right, I'm going to register a business name, Casper Conde Bakeries, I'm going to register an ABN for Casper Conde Bakeries, I'm going to fund you, I'm going to wear the liabilities and I'm going to be vicariously liable for you," it couldn't be seriously suggested that for insurance purposes I wouldn't be fixed with his knowledge and, with respect, it can't be seriously suggested here. 1. A little later in his submissions, Mr Potts SC added: This is a million miles from the scenario my learned friend put, which is two different insureds and one being deprived of insurance because of the misconduct of another. It is the insured here who is claiming liability for the conduct of the Knox Grammar School business but says - - - … Absolutely. If it be necessary to call out a special rule of attribution, so be it. If it be necessary to go so far as to say, in some sense, operating a business where the name is owned by UCPT, where the UCPT holds the assets, the liabilities and the ABN number, that the people who work in Knox Grammar School – and for which it accepts and pays liabilities on a vicarious liability basis, it would be necessary to characterise them as agents, so be it. But it really is, with respect, clever lawyering to try to draw a hard line between the knowledge of UCPT and Knox Grammar School while at the same time UCPT says, "I want indemnity for my vicarious liability for the acts of people who work at Knox Grammar School." 1. There is some attraction in those submissions which attempted to grapple with the UCPT's chameleon-like stance, in asserting that it has a liability in relation to claims made against the school, but had no connection with its management or operation that would fix it with the knowledge of those who did and were legally responsible for the liability arising. Was the Headmaster or the School Council the repository of knowledge for the business of Knox? 1. In the above context the central issue is whether the UCPT was fixed with the knowledge of the School Council and/or the Headmaster for the purposes of s 40(3) and/or Exclusion 7(c). Legal principles on attribution for insurance 1. The parties took the Court to a number of authorities which considered the attribution of knowledge of corporate entities which are examined below. They are mostly concerned with the "upward" flow of attributed knowledge as a reciprocal concomitant of a "downwards" delegation of authority. Whilst they usefully articulate the relevant principles, the following consideration of them should not obscure the particular circumstances of the present case. Here, the relevant liability attaches to the members of the School Council and it is that liability which is insured under its policies. Without the consent of the members of the School Council (even if it be tacit as is the case) the UCPT cannot assume its liability to the former students any more than it may exercise its rights to indemnity under its policy. As a matter of substance, it must be acting as, in effect, the agent of the members of the School Council in both respects. It assumes the School Council's liability as agent (being for the purposes of the operation of the UCA) and acts as the council's agent in seeking indemnity. 2. On the issue of the attribution of corporate knowledge, the decision in Commonwealth Bank of Australia v Kojic (2016) 249 FCR 421 is important. It concerns the knowledge of a corporation for the purposes of a claim of unconscionable conduct, and specifically whether, for the purpose of attributing a state of mind to a corporate entity, the knowledge of its employees could be aggregated. There, Edelman J (with whom Allsop CJ and Besanko J agreed) considered the general principles of the attribution of knowledge in the setting of a corporate group. His Honour noted that the concept of the "directing mind and will" of a company, as articulated by Viscount Haldane LC in Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705, 713 (Lennard's Carrying), had been rejected as the sole test in this context. In doing so, his Honour referred to the opinion of Lord Hoffmann in Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500, and, citing from that decision, observed that it: … is a question of construction in each case as to whether the particular rule requires that the knowledge that an act has been done, or the state of mind with which it was done, should be attributed to the company" (at 511). The relevant rule of attribution must be tailored to "the terms and policies of the substantive rule" (at 512) and the rules of attribution in a particular case depend on the construction of the particular statutory provision of attribution (at 511). 1. Edelman J (at 446 [100]) then referred to Bilta (UK) Ltd (in liq) v Nazir (No 2) [2016] AC 1, 65 – 66 [187] – [190] (Bilta v Nazir (No 2)), where Lords Toulson and Hodge JJSC identified a threefold taxonomy of corporate attribution. The first category was where legislative or corporate rules provide for the attribution of liability for acts of directors, which are treated as the acts of the company. The second was where a company will incur direct liability through the actions of agents acting within the scope of their authority. The third, and more open-ended class, was where the attribution for the acts of others was appropriate in circumstances where a rule of law impliedly excludes the first two general principles. This latter category is sometimes referred to as creating a "special rule of attribution" for the particular circumstances of a case. Edelman J added that in each instance it is necessary to consider the context in which the question is being posed. 2. The discussion in Bilta v Nazir (No 2) is instructive in the context of the present matter. In relation to the special rule of attribution and, indeed, each of the identified rules of attribution, Lords Toulson and Hodge JJSC emphasised the importance of considering the legal context in which the question of attribution is to be assessed. They also referred to Lennard's Carrying, where the question was whether a ship-owning company was liable for loss caused by one of its ships as a consequence of the company's actual fault or privity. It was held that the fault of Mr Lennard, who was a director of another company which was the manager of the ship and who was also a director of the ship-owning company, should be attributed to it. Viscount Haldane LC and Lord Dunedin regarded the question as one of statutory construction which depended upon the particular circumstances and facts of the case. Relevantly, in determining whether the acts or knowledge of an individual is that of a company, consideration is to be given to the terms of the particular statute and its application to particular facts. For instance, in Tesco Stores Ltd v Brent London Borough Council [1993] 1 WLR 1037, which was concerned with the improper supply of a video to a person under the age of 18, the relevant knowledge was that of the employee who supplied the video, and not that of the company's senior management. 3. In Bilta v Nazir (No 2), their Lordships applied the same principles as to the attribution of knowledge as those applying in the context of private contracts and specifically policies of insurance. They held (at 69 [198]): The courts have also had to consider questions of attribution of knowledge or actions in a contractual context such as that of an insurance policy. In that context the terms of the insurance policies are relevant and can be decisive as the court seeks to give effect to the intentions of the parties as expressed in their contract. … 1. They then referred to Arab Bank plc v Zurich Insurance Co [1999] 1 Lloyd's Rep 262, where for the purposes of construing a policy of insurance, Rix J held that the directing mind and will of the company for all other purposes — namely, that of the managing director — was not attributed to the company in respect of losses sustained by the fraud of the managing director himself. As the policy insured the directors and the company as separate insureds, and because it included fidelity cover, it was not appropriate to ascribe the fraudulent director's intention to the insured company. 2. In its submissions on this issue, Allianz called in aid the reasoning of Willmer LJ in The Lady Gwendolen [1965] P 294, 343 – 344 (The Lady Gwendolen), where his analysis of the attribution of knowledge to a corporate entity included the following: Where, as in the present case, a company has a separate traffic department, which assumes responsibility for running the company's ships, I see no good reason why the head of that department, even though not himself a director, should not be regarded as someone whose action is the very action of the company itself, so far as concerns anything to do with the company's ships. 1. That case concerned whether the company that owned a vessel which was involved in a collision was aware of its previous regular reckless operation by its master. The master's conduct was known by the marine superintendent of the vessel's owner and the head of the traffic department of the company. On these facts, it was the latter's knowledge that should be attributed to the company for the purposes of whether it was aware of the conduct of its shipping activities. 2. Allianz referred also to the decision in Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 471. It concerned the liability of Nationwide News for tortious conduct towards an employee of ISS Security, which provided security services to it. The conduct related to alleged bullying and harassment by a Nationwide News employee. The question was whether his conduct could be attributed to Nationwide News. Beasley JA opined (at 505 [235]) that the question is resolved, in part, by considering the position and authority of the person said to have performed an act as the company. In the case at hand, the relevant officer was the Fire and Safety Officer who had a high level of seniority in the organisation, whose management role involved all the company's security requirements across the country, and who was responsible for managing its contracts with ISS Security. It followed that his position and responsibilities rendered him its directing "mind and will" for the management of its security arrangements, including management of the injured employee's work. On that basis, his tortious conduct was that of the company. 3. To similar effect is the earlier decision of Rogers CJ in Lindsay v CIC Insurance Ltd (1989) 16 NSWLR 673 (Lindsay v CIC), where at issue was the knowledge of an insured for the purposes of non-disclosure under s 21 of the ICA. It had claimed indemnity in respect of fire damage to its premises. The insurer declined it in reliance on the insured's failure to disclose that the premises were being used as a brothel, or as a place where "men and women resorted on payment of a fee to engage in immoral conduct involving exchanging sexual partners and group sexual practices". The premises were located in Sydney. The insurer asserted that, had it known of these matters, it would not have provided cover. The owners were, themselves, unaware of the manner in which the premises were being used as they had left the management and running of the premises to an estate agent. In these circumstances, the Chief Justice held that the managing agent's knowledge was attributable to the owners for the purposes of non-disclosure. At 684, he said: In my view, the pre-1984 law imputed to a proponent the knowledge of appropriate agents (cf Tarr Australian Insurance Law (1987) at 76 footnote 32). The managing agent of a block of shops and offices is, in my opinion, such an agent. His knowledge of matters relating to the property which impact on the insurance risk ought to be imputed to the owners. In other words, by delegating the management of the property to an agent, the owners cannot avoid having knowledge of matters which might result in a proposal being refused or a higher premium being imposed. That law was enacted in s 21(1). 1. Use of the premises as described increased the risk of damage to them and, as it was a matter of which disclosure was required and was known by the agent, the insurer was entitled to reduce its liability to nil under s 28(3) of the ICA. 2. That decision was referred to with approval by Hodgson CJ in Eq in Permanent Trustee v FAI (at 261) as follows: The case of Lindsay is authority for the proposition that, in relation to the insurance of a particular piece of property, the knowledge concerning that property of a person to whom the management of the property is delegated is attributed to the principal. In my opinion, that is reasonable, because an insured seeking insurance, and having a duty of disclosure, would be bound to inquire from a person to whom it had delegated the management of the property to be informed of matters concerning the property that could be relevant to insurance. 1. For clarity, that proposition was not in issue when the matter reached the High Court which overturned the decision of Hodgson CJ in Eq and that of the Court of Appeal. Whose knowledge is relevant in the present case? 1. Here, an initial question is the identification of the entities whose knowledge was that of, or can be attributed to, the insured for the purposes of the application of s 40(3). That encounters the immediate issue of, who is the relevant insured? As the UCPT acknowledged, its role in the proceedings by the third parties arises only by its assumption of liability for the conduct of others within the UCA organisation, and its claim on Allianz is in respect of the liability which others owed to the third parties. In this respect, the substance of its claim on the policies must be a claim on behalf of those UCA agencies or individuals who were actually liable to the former students. It is not able to make a claim on its own policies in respect of its assumption of the liabilities of others as the cover is only in respect of liability arising out of any negligence on its part. The primary judge's reasoning and conclusion 1. The primary judge (at [601]) rejected the proposition that, for the purposes of the policies of insurance, Knox was indistinguishable from the UCPT, the former being merely a trading operation of the latter. In so concluding he focused (at [601]) upon the terms used in the policies and, particularly, that they extended to persons who do not carry on their own business such as voluntary workers, committee members and counsellors, and that the wide definition of "the Insured" and the application of the terms to them individually, rendered them "composite policies" giving cover to multiple entities. His Honour also noted that, by reason of the regulations of the Assembly, the UCPT was a proper defendant in any action against the UCA or any of its institutions. In this respect his Honour said (at [604]): … It would be within the UCPT's own business to meet claims that it was directed to meet by the Synod in respect of any litigated matter involving the UCA or its various institutions. I am unable to see how any rule of attribution could justify, on that basis and in the context of relations with its insurer, the knowledge or awareness of representatives of KGS being imputed to the UCPT. 1. Although it was within the UCPT's ordinary business to meet the claims of any of the UCA's agencies, any amount so paid was not a sum in respect of a liability for which indemnification was provided under its policies with Allianz. There is no construction of the policies which countenances that the UCPT may be indemnified in respect of the loss of another entity. The cover under its policies is limited to liability arising from its own negligence and not a liability of another for which it has purported to assume responsibility. 2. That aside, his Honour addressed several of Allianz's submissions to the effect that the UCPT was fixed with the knowledge of the Headmaster or School Council. At [666], he concluded that the question of attribution was bound up in "the governance structure of the UCA as a whole, and an appreciation of where the UCPT, KGS and certain other of the UCA's constituent bodies sit within that architecture". In this respect, he held (at [667]) that from both a functional and structural perspective, "Uniting Resources" was and remained the entity within the UCA with the immediate responsibility of obtaining insurance on its behalf. Uniting Resources was ultimately accountable to and subject to the oversight of the Synod which was, in turn, accountable to the Assembly. The import of this was not self-evident. It may well be that Uniting Resources was responsible for obtaining insurance cover for the UCA, but that does not directly address the question in issue of the attribution of knowledge to the UCPT. 3. His Honour also found (at [667]) that "[n]one of the UCA, Assembly, the Synod, KGS or the KGS council is a legal entity having a separate legal personality". Again, whilst that may have been so, Uniting Resources was also not a legal entity, being the renamed "Board of Finance and Property" within the Synod. Conversely, the individual members of the School Council were legal entities who could have been liable at the suit of former students for breaches of duties owed to them. 4. The fact that the members of the group referred to as Uniting Resources sought and obtained insurance for the UCA was relied on by the UCPT on this appeal, though its relevance was also unclear. True it is, that persons from that group undertook arranging the insurance, and it seems that a person in that group undertook the task of implementing the insurance sweeps of the many groups, entities, councils, boards and the like in the UCA. However, that again says nothing about whether the knowledge of claims or circumstances by each of the insureds under their respective policies is irrelevant to the cover provided. 5. The primary judge also observed that many insureds covered by the policy were described in generic terms within the definition of "Insured". This was said (at [670]) to be reflective of the description of the structure of the UCA as found in the quotation slips and underwriting slips prepared by Marsh of which Allianz was aware when it granted the policy and which included Condition 1 (concerning the notification of claims, which is considered in detail below). His Honour held that the structure reflected "a clear delineation between the UCA (and the UCPT) on the one hand, and KGS" which was itself reflected in the manner in which the parties acted between themselves. This apparently justified treating the UCPT and the school as separate entities for insurance purposes. Further, he held (at [671]) that there was nothing in the structure of the UCA which deemed "the knowledge or awareness of one person or body to be the knowledge or awareness of the UCPT". 6. His Honour concluded (at [672]) that, in relation to the cover provided to Knox concerning the claims made against it, there was no rule of attribution that any knowledge of the school's Headmaster, Mr Weeks, or any member of the School Council was relevantly attributable to the UCPT as the insured which assumed responsibility for any liability arising from the claims. Allianz contests the primary judge's finding 1. Allianz contests the primary judge's finding and submitted that, in any one of several ways, the UCPT was fixed with the knowledge of Knox, whether that be the knowledge of the Headmaster or the School Council, for the purpose of s 40(3) and Exclusion 7(c). The context in which knowledge is sought to be attributed to the UCPT 1. As the authorities referred to above disclose, the question of whether there is any relevant attribution of knowledge to the UCPT is one to be determined in the context and circumstances of the particular case, especially if the issue is one of whether a special rule of attribution is to apply. Necessarily, where the issue of attribution is as between two parties, as opposed to where it arises under statute, the context and circumstances known to both parties will be significant and, in the case of an insurance policy, the policy terms will be important. The policy terms 1. An essential aspect of the context in which attribution might occur are the policy terms and those which are relevant have been set out above. Whilst their import is considered below, of fundamental relevance is that the polies are undoubtedly composite, and the liability of each insured covered is separate and distinct. The UCA's internal insurance reporting protocols 1. When consideration is given to the UCA's internal procedures and protocols as a contextual consideration, some difficulty is immediately encountered. The absence of any clarification from any persons with an understanding of the manner in which a Synod operated was rather unsatisfactory and required the drawing of numerous inferences. In particular, from the array of documents in evidence, it was possible only to piece together an obviously incomplete picture of the manner in which a Synod ascertained any claims or potential claims against it for insurance purposes. 2. An initial document to which the Court was taken was an "Insurance Quotation Slip" which had been prepared by Marsh for the UCA when it was seeking insurance quotes for the period from 31 March 1999 to 31 March 2000. On the first page of the section headed, "Introduction", Marsh wrote: Prior to renewal date each insured Synod will provide "No Claims" declarations from various institutions within their control. For the purpose of notification of professional indemnity claims, "the Insured" is taken to mean "the General Secretary of the Synod". 1. Though this was said to support the conclusion that the knowledge of each insured for all purposes under the policy was to be that of the General Secretary of the Synod, the contrary is true. The statement contemplates that the knowledge of the "various institutions" was relevant to whether notice of claims had been received by each particular insured. The expectation was that each institution would make the necessary inquiries and would provide a declaration about their knowledge to the insurer. In other words, prior to renewal and the setting of a new premium, the insurer would receive information from each of the relevant institutions as to any potential claims or of facts which might give rise to a claim. In the context of s 40(3), any identified possible liability in respect of any potential claims would then be allocated to the current policy at the time of notice. Any new premium would be calculated on the basis that claims arising from those disclosed facts would be indemnified under the existing policy, but not the new one. 2. The UCPT submitted that, though notification was to be provided by the General Secretary, it was only that person's knowledge which was relevant to the operation of the policy. It was also submitted that the "No Claims" declarations were provided to the General Secretary rather than to the insurer, though that is obviously not what was contemplated. Indeed, the evidence showed that the insurance declarations were provided to it. 3. The preferable construction is that the statement made in the Insurance Quotation Slip was to inform the insurer of such relevant information from all potential insureds who would know of potential claims. That is the antithesis of the UCPT's submission. That the notification of claims would come through the General Secretary of the Synods is relevant to notification of the making of actual claims against the insured entities, but is irrelevant to the question of the knowledge of an individual insured in respect of potential claims. 4. The Insurance Quotation Slip also provides a history of the Uniting Church and a description of its structure, including that the Synod is the council of the UCA operating at state level. It further identifies the wide variety of activities in which the Church engages and the numerous institutions involved, including schools and colleges. Specifically, it discloses that the UCA operated 44 schools across Australia and 10 residential colleges. That is relevant to the issue at hand. In circumstances where the insurer is being asked to cover an extremely wide range of disparate entities it is most unlikely that the knowledge of an individual near the apex of the UCA hierarchy would be the sole source of knowledge relevant to the rights and obligations between the insurer and its multitude of individual insureds. The circumstances here provide a useful example. The effect of the UCPT's submissions would be that, although the Headmaster and the members of the School Council (whose liabilities were within the scope of the insuring promise) were in 2004 aware of LKA2 and its contents and implications, their insurance cover would be unaffected because LKA2 was allegedly not brought to the attention of General Secretary or the UCPT until a much later time. If that were so, the same result could apply in relation to any liabilities of the many other agencies and institutions if their breaches of duty were not brought to the attention of the General Secretary. That result is the antithesis of the inherent nature of insurance, being to provide protection against fortuitousness. 5. The Court was also taken to a document containing certain reporting guidelines in relation to sexual harassment or sexual abuse, which was circulated within the UCA. A copy of it was included with the Insurance Quotation Slip given to MMI/Allianz, and, apparently, was said to indicate the manner in which the UCA sought to acquire information relevant to the insurance relationship. Such guidelines were regularly distributed throughout the UCA entities and organisations. They addressed considerations relevant to assessing whether any circumstances should be reported as potential insurance claims, and explained the importance of notifying the insurer of any circumstance that indicated the possibility of a claim so that any claim which subsequently arose from them would be deemed to be within the then current period of insurance. Thereafter the following statements were made: Failure to notify the insurer prior to expiry of these "claims made" policies (31 March), may result in no cover being available. In an organisation such as the Uniting Church in Australia it will be a question of fact as to whether such information known to an individual within the Church is in fact information of which "the insured" is aware. In any set of circumstances, these disclosure duties may not be tested until a matter is before the court. It is therefore imperative that any allegation, or the discovery of any circumstance which indicates the possibility of a claim arising, be immediately reported to the General Secretary of Synod for notification to the insurer. It is most important that any circumstances which are known within the Church or its agencies be passed on immediately. At no stage should any person or group of persons within the Church or its agencies prevent or withhold the passing on of the relevant facts to the General Secretary of Synod. Failure to disclose such information will seriously prejudice any potential to recover compensation under the Church's Liability Insurance programme. (Emphasis in original). 1. These statements render it tolerably clear that, on insurance matters, the UCA did not rely solely upon the knowledge of the General Secretary of claims or facts which might give rise to a claim. The members of the many insured agencies were exhorted to pass on information about such claims or facts for forwarding to the insurer. Inferentially, it was a necessarily explicit expectation that the insurer would be provided with all relevant information from the knowledge held across the agencies, rather than that which was exclusively in one person's possession at the relevant time. 2. Consistently with this, the UCA followed the regular practice of requiring its agencies to make insurance disclosures, including requesting the Knox School Council to provide declarations in relation to, inter alia, claims or circumstances of which they are aware which could give rise to claims. Evidence of such activities appears in the content of the annual Board Papers of the School Council, some of which were tendered. Accumulating such information was achieved by requesting the senior members of the school staff, including the Headmaster, to complete an insurance declaration. This process, common to all entities within the UCA, was referred to as an "insurance sweep". The parties who were making declarations were reminded of the importance of reporting any known claim, or circumstance that may result in a claim. So much appears from a fax from Mr Cameron of Knox dated 12 March 2001 to Mr Piening of the UCA, which stated that it attached completed insurance declarations. Included with the fax were 15 separate declarations from, amongst others, Mr Cameron in his capacity as the Finance Director, the Headmaster, the Chaplain, the Director of Boarding, and the Director of Studies. Each included the following statement by the signatory: We confirm that there are no known claims or circumstances that have not as yet been reported to the General Secretary of the Synod. 1. The UCA's annual insurance sweep from the senior members of the school is evidenced by the assortment of completed forms from other years included in the evidence. 2. It is clear that the UCA and the UCPT were properly aware of the need to undertake this process in order to keep the insurer appropriately informed of potential claims against any of the respective insureds. In this context, Allianz referred to a letter dated 7 January 2002 from the Executive Director of the NSW Synod to a wide range of persons who oversaw many of the UCA's insured agencies, including the Headmasters of its schools and colleges, advising that the Church was in the process of renegotiating its insurance for the year commencing 1 April 2002, that the insurance sought was in the nature of a "claims made" policy, and of the obligation to notify the insurer of any event and its circumstances which could lead to the making of a possible claim. It also warned of the possibility of a claim being denied by the insurer if the recipient of it was aware of a matter which was not notified. It stated, inter alia: … For your assistance, a "claim" is a legal process (i.e. a writ or complaint issued in a court) or any threat or intimation of the commencement of legal process. In addition to claims, you are required to advise us of any events or circumstances which you believe could lead to a "claim" being made against "the Church" in respect of the these (sic) above policies The underwriter may deny liability if: -You become aware of an incident that may lead to a claim, but have not advised the underwriter (through this office). -You fail to report an incident to this office of which you have become aware prior to the end of the policy year (1 April of each year). Please note that the actual date of the incident has no bearing on whether the matter should be reported. The operative date is that on which YOU FIRST BECOME AWARE of the incident. … (Emphasis in original). 1. Enclosed with the letter was a copy of the reporting guidelines which have been referred to above. 2. With due respect to the UCPT's submissions on this issue, the foregoing indicates that, for the purposes of insurance renewal, the UCA was fully aware of the need for each and all insured agencies and organisations to ascertain the existence of claims or any facts which might give rise to claims, so that they may be notified to Allianz. There is no evidence to suggest that the UCA believed that the only relevant knowledge was that of the General Secretary or of the UCPT. 3. No issue was raised by the UCPT that the above referenced letter was internal to UCA and, as such, perhaps irrelevant to the issue under consideration. Nevertheless, the fact that the insurer would have received the subsequent insurance declarations or have been informed of their content, would have left it in no doubt that, as between it and the insureds under the policies, the notification of facts for the purposes of the policy was not limited to the knowledge of the General Secretary. 4. In passing, reference was also made to an insurance proposal for Knox for cover for the year beginning April 2005. It would be consistent with the UCA's system of group cover of the individual entities that each completed such a separate proposal, though the insurance was negotiated by others within the UCA. The Court was taken to the insurer's questions which included the query, "Is the applicant or any of its principals, partners or directors aware, after reasonable inquiry of all staff and managers, of any other facts or circumstances which may give rise to a claim of the type insured by the proposed insurance?". The answer given to that question was "No". The import of this is that, as between the UCA and Allianz, the scope of knowledge relevant to the policy's terms was not to be limited to the members of the UCPT or to the General Secretary. Rather, the net was to be cast much wider so as to capture the knowledge of staff and managers. That inference should be accepted, and is consistent with the broader evidence referred to above. The rule of attribution in the present case 1. The foregoing contextual analysis establishes that, as between Allianz and the insured entities and organisations within the UCA, it was the knowledge of the individual insured entities, or of the persons who constituted them, that was relevant to their entitlement to cover under their respective policies. The policy 1. That conclusion is, in part, founded upon an appreciation of the discordance between the insured under the policy, in respect of whose liability indemnification is sought, and the interposition of the UCPT as the defendant in the third-party proceedings and then as the claimant on the policy. Assuming that context, it is difficult to conclude other than that a special rule of attribution would apply so that the UCPT is fixed with the knowledge of those insureds in respect of whose liability it seeks indemnification. It is, after all, acting on their behalf in seeking indemnity from Allianz in respect of their liability. Alternatively, under the arrangement which involved utilising the UCPT as a matter of convenience to defend claims and make claims on the insurer, as it cannot claim on its policy because the liability does not arise from its negligence and breach of duty, it is that of the school which needs to trigger cover. That being so, the school's knowledge of the possibility of that claim must attach to the UCPT in its attempt to secure indemnity. 2. In relation to the content of the policies, perhaps the most important element is their composite nature such that the terms and conditions apply individually to all persons and entities within the UCA's umbrella. Though the policy is composite, in that it covers a group of separate entities within one set of terms, it is plain that there is severance of cover for each insured. This supports Allianz's contention that it is not "common cover" so that the knowledge of one is the knowledge of all. That must also be taken into consideration when understanding that the UCPT here is not covered by the terms of its own policy but, in an arrangement of convenience, accepts the liability of a separate insured and seeks to enforce indemnity for which that other would be barred by its independent knowledge. 3. In that respect, the management and administration of the school vested in the School Council and the Headmaster, each of whom would, prima facie, be individually entitled to indemnity in respect of that party's liability arising from mismanagement or maladministration. Conversely, part of the price of that cover is their individual obligation to be bound by the policies' terms and conditions, including Exclusion 7(c). Similarly, vis-à-vis the insurer, they are the "insured" in respect of the relevant liability for the purposes of s 40(3) and enjoying its benefits. In this way, there is nothing remarkable about a conclusion that the knowledge of the insured in respect of whose liability policy cover is sought, is the relevant knowledge for the purposes of the policy. For example, if the relevant members of the School Council and the Headmasters were sued by former students in respect of the sexual abuse occasioned to them, a declinature of indemnity by Allianz on the basis that they were aware of the facts revealed by LKA2 prior to the policy's inception would be wholly unsurprising. The result cannot be different merely by the UCPT "assuming" their liability and seeking indemnity on their behalf. As the UCPT, in the furtherance of the fictional but convenient arrangement, does not act in its own interests in defending the claims and seeking indemnity, but in the protection of the Council and Headmaster, it is attributed with their knowledge when doing so. 4. Nothing in any of the policies suggests that any person or entity was entitled to make a claim upon the insurer in respect of the liability of any other insured. On the contrary, as has been explained, there is a complete severance of their interests. That being so, Allianz has no obligation to indemnify the UCPT in respect of the liability of another insured for which the UCPT has artificially assumed responsibility. That conclusion defeats the proposition that, where the UCPT is sued as a separate entity in respect of another insured's liability, its knowledge is the relevant feature rather than that of the School Council or Headmaster. 5. The policies' cover of non-legal entities such as associations does not alter the above conclusions. That broad wording to describe the identity of the "insureds" is intended to accord as wide a coverage as possible and ensure that all persons within the UCA organisation have protection. It does not change the obligations of those actually indemnified. The structure of the UCA 1. With respect, contrary to the primary judge's conclusions, the structure of the UCA does not compel or even suggest the conclusion that the knowledge of only the General Secretary of the Synod or of the UCPT (or of Uniting Resources) is to be taken to be that of the many entities and agencies within the organisation. Given this disagreement with the learned primary judge's conclusion it is necessary to reconsider that structure to some extent. 2. The UCPT was the entity primarily established for holding the property of the UCA and its entities in New South Wales. This was no doubt necessary or, at least, convenient given that non-legal or unincorporated entities, such as the school, could not hold property, rights or entitlements. It would, of course, be impracticable for the members of the School Council to be the legal owners of the school's property, as the identity of its members changes from time to time, which would necessitate constant transferring of title. 3. Although the UCPT holds property on trust for others and claims to be able to sue and be sued for them, that does not alter third parties' rights against those liable for loss or damage. Nor does it alter the rights or obligations of the individual insureds under their severed policy interests in their contractual relationship with Allianz. The UCPT's submission to the contrary was, in substance, that if it assumes responsibility for the liability of a UCA insured, its rights and obligations vis-à-vis Allianz, are thereby modified accordingly so that whilst the insured's knowledge of prior facts or circumstances would have negated its entitlement to indemnity, when the UCPT assumed responsibility, it is only its knowledge or absence thereof which is relevant. The method by which those insurance rights were transmogrified was not explained adequately, or at all. The UCPT is forced to this position because it is unable to claim under its cover which does not extend to the liability sought to be imposed by the claimants, it not being its negligence or breach of professional duty. 4. As the UCPT was acting de facto on the School Council's behalf in the defence of the claims, if it were assumed, as the UCPT submitted, that Allianz was aware of the role which the UCPT played in the UCA organisation, and that it would act as the nominal defendant for any and all entities within that organisation against whom litigation was brought, and that it would claim on Allianz for indemnity in respect of that liability, the question then becomes whether, for the purpose of resolving the UCPT's rights in that respect, the knowledge of the entity represented, who was an insured under its own cover and whose liability is sought to be indemnified through the UCPT's representation, should be attributed to the UCPT. So analysed, the only responsible answer is in the affirmative, and the circumstances of the present case exemplify why that is so. Here, the claims are in respect of the liability which arises from the School Council's failure to administer, manage and operate the school properly and it was it who had any right to indemnification for any liability from loss arising consequent upon their failure to do so. It is not credible that, in the enforcement of the School Council's claimed right to indemnification in respect of these claims, its prior knowledge of relevant circumstances would not be relevant to its rights under its insurance cover in which such facts are adversely influential. The mere fact that, as a fictional convenience, the UCPT would defend any action on its behalf as the named defendant in its place (and admitting liability as part of that process) and seeks indemnity in respect of the School Council's conduct, cannot alter the essential importance to that claim of the School Council's knowledge. That Allianz probably knew, or might be taken to have known, of the scheme did not mean more than that the UCPT was engaged in a process of convenience in which the actions it was defending would always be based on the School Council's liability so that indemnification would depend on that party's relevant conduct and knowledge. In other words, Allianz knew of the fictional aspects of the scheme in which, here, the relevant liability, rights and indemnity and relevant knowledge was that of the School Council. 5. The same proposition can be put slightly differently. Where the UCPT assumes the entitlement of any insureds under the policies to make claims on Allianz, the quality of those insureds' choses in action in relation to their insurance entitlements does not improve for that reason. Nor does the entitlement of the UCPT. 6. It is worthy of mention that there was no evidence before the Court as to why the former students commenced proceedings against the UCPT, which was not an obvious defendant. Though it be speculation, it is likely that, prior to the litigation commencing, the intending plaintiffs were informed that they were able to initiate the claim against the UCPT. The UCA's internal protocols 1. Neither do the UCA's internal protocols suggest other than that the UCPT should be fixed with the knowledge of the entity or person in respect of whose indemnity it makes a claim. From the commencement of the relationship with the insurer and in its Insurance Quotation Slip, the UCA indicated that it would make inquiry of each of the insured institutions under the policy for information relating to claims or facts which might give rise to a claim. Necessarily, that reflected the legal relationship under the policies, namely that each insured was individually subject to the terms and conditions to the extent that they could be applicable. It also reflected the reality that not only did the policy cover a wide range of entities, but many of them were also substantial organisations from which significant claims could emerge. It would be unusual for an insured group of this kind to expect an insurer to provide cover to an insured which had prior knowledge of many large claims, simply because some other person (or persons) in a wider umbrella organisation were not aware of those matters, or that such an omission could be cured by the device of a fictional convenient arrangement for the defence of claims. 2. To similar effect are the UCA's reporting guidelines which did not suggest that it was the knowledge of only the UCPT or the General Secretary that was to be relevant to whether or not notice was to be given to the insurer for the purposes of s 40(3). The guidelines were, in fact, to the contrary. 3. Further still, the process of undertaking annual insurance sweeps speaks of the knowledge of the individual insureds as being relevant to their entitlement to cover. The same can be said of Knox's making insurance proposals directed to Allianz from time to time. Conclusion on special rule of attribution 1. The necessary and, indeed, inevitable conclusion is that the circumstances lead to the result in accordance with the protocol adopted that, when the UCPT makes a claim under a policy against Allianz on behalf of another insured entity, it is fixed with the knowledge of that entity. That is aside from the result of the facts known to all relevant parties that the defence and claim for indemnity are conducted on behalf of the entity, that entity's knowledge is directly relevant to the claim for indemnity. 2. Here, the liability in question was that of the members of the School Council and/or of the Headmaster at the relevant times. No reason was given as to why those persons would not be liable for the claims of sexual abuse which occurred at the school which they managed and operated. It is sufficiently clear that the Headmaster was the agent of the School Council for the purposes of receiving information in relation to the school's activities and that the latter was aware of LKA2 in its own right when the report was tabled at the School Council's meeting. For the purposes of the School Council's indemnity under its insurance policies, the UCPT is taken to have had its knowledge. 3. In the context of the fiction which the UCPT adopted in its relationship with Knox, the formation of a special rule of attribution does not require recourse to issues of duties to communicate: see generally South Australian Housing Trust v State Government Insurance Commission (1989) 51 SASR 1, 23 and Peter Watts and Francis Reynolds, Bowstead & Reynolds on Agency (Sweet & Maxwell, 23rd ed, 2023) ch 8, p 583 – 610; or to questions of whether someone has power to make a final decision without further reference: see The Lady Gwendolen. In this case, there is no management or structural arrangement connecting the School Council to the UCPT which carried the necessarily concomitant delegation of authority on which a relevant attribution of knowledge could occur. Rather, the UCA's protocol for defence of actions artificially interposed the UCPT between the School Council on the one hand, and the former student claimants on the other, and had the UCPT claim against Allianz in respect of any liability. That also was artificial. Such circumstances require the commensurate attribution, as has been described. 4. As mentioned above, a slightly alternative analysis has the UCPT as the agent or representative of the School Council in seeking indemnity in respect of its liability to the former students. As such, the UCPT is not claiming in respect of its own liability, of which there is none that comes within its cover. Assuming this to be the manner in which the UCA operates, a matter of which the insurer knows and in which it cooperates, the rights of the School Council to indemnity as the party liable must be affected by its knowledge to the extent to which it is relevant to the policy terms. 5. Although it was not argued by the parties (and for that reason not considered as part of the reasoning) it is apt to keep in mind that the parties' reciprocal obligations of utmost good faith are relevant here, with the word, 'utmost', having significance. On the subject of relationship with the insurer, the principle might expect that if an uncompromised insured could, would and does accept the liability of a co-insured for a wrong for which the former was not liable, it would also, by implication for the insurer, have undertaken to have taken steps to be informed of all matters relevant to the insured risks, or to have impliedly appointed the co-insured to share knowledge of those facts. In that context, the insurer could expect that the knowledge of the co-insured would be attributed to the insured making the claim for indemnity. A pleading issue? 1. A further ground on which it might be held that the UCPT was aware of the content of LKA2 when received by Mr Weeks on or about 7 May 2004, arises from the manner in which the UCPT framed its case. In paragraph 1 of its concise statement in the action, it was stated that: … The Policies covered various professional businesses of UCPT including Knox Grammar School (KGS) which is a school for male students from Kindergarten to Year 12 with both day students and boarders. (Emphasis added and original emphasis omitted). 1. The UCPT sought to pursue the action on the basis that the activities conducted at Knox constituted one of its businesses. This was propounded as justifying its position as the defendant to the claims by former students, and as the claimant in its own right for indemnity for its liability. Based on those assertions, the authorities to which reference has been made above: The Lady Gwendolen; Lindsay v CIC and Permanent Trustee v FAI: would establish that the knowledge of those to whom the UCPT had delegated the management and operation of the business of the school, would be attributed to it. 2. On the hearing of the appeal, the UCPT sought to minimise the import of its statement in paragraph 1 of its concise statement. It now argues that the statement made was not "a pleaded statement of fact of general application" though, if that were so, one wonders why it was framed as it was. It was submitted that the statement was the mere adoption of the description of the "Insured's Profession" as used in the policies of insurance, and that it was in that context only that the description of the relationship between it and the school was used. This contention involved a misstatement of the policy terms. It also involved a rather ambitious construction of the policy to the effect that all of the insureds under the policy, including the specifically named insureds, carried on all of the professions or businesses identified. That submission should not be upheld. 3. The UCPT's submission to the effect that its assertions in its concise statement are inconsequential is disturbing. The required purpose of a concise statement is to alert the other party and the Court to "the key issues and key facts at the heart of the dispute and the essential relief sought from the Court before any detailed pleadings": Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788 (2021) 287 FCR 388, 416 [140] (Allianz v Delor Vue (FC)); see also Australian Securities and Investments Commission v Westpac Securities Administration Ltd (2019) 272 FCR 170, 212 [185]. Whilst assertions made in a concise statement are not the same as allegations in a pleading, a concise statement cannot perform the task ascribed to it unless it can be said to set out accurately the position of the party propounding it. So, in this case, where the UCPT sought to frame its entitlement to indemnity for liability to former students of Knox on the basis that the sexual assaults arose in the conduct of "one of its businesses", it cannot later be heard to disclaim the knowledge of those who operated the business on its behalf. That is particularly so in the absence of any other pleadings which might have elaborated upon the issue as articulated in the concise statement. 4. As the UCPT approbated the position that it did in paragraph 1 of its concise statement for the purposes of establishing its entitlement to indemnity, it cannot then reprobate it when the asserted connection would result in the operation of s 40(3) and Exclusion 7(c) adversely to it. 5. Were it to be necessary, it should be found that the UCPT accepted that it operated Knox, with the consequence being that the knowledge of those whom it held out as conducting its management and operation, being the Headmaster and the School Council, would be its knowledge for the purpose of the policies of insurance. An alternative 1. I have had the advantage of reading the draft reasons of Colvin and McEvoy JJ. In Issue (2) they articulate a further basis on which it can be concluded that the knowledge of Mr Weeks can be attributed to the UCPT in relation to the claims made against Allianz. If my analysis is not within the parameters of the manner in which the case was advanced to this Court, then I respectfully agree with their Honours' conclusion that, for the purposes of the policy, the awareness of Knox of LKA2 was the awareness of facts, and with their reasoning. The receipt of LKA2 1. The primary judge found that on 7 May 2004, Mr Wilson finalised LKA2 and provided it and the associated materials to Mr Weeks on or about that date. It was not suggested that Mr Weeks did not read the entirety of such important materials. The appeal progressed on the basis that he did. On 16 June 2004, it was tabled at a School Council meeting, during which it was noted that Mr Wilson considered that Mr Nisbett was an "extreme risk to the students, the reputation of the School, and his own reputation". It was also noted that the Ombudsman and the Commission for Children and Youth Protection had been notified of the outcome of the investigation and that, in the absence of any claims made against the school, the matter was considered closed. 2. The report, together with the associated materials, was given to the NSW Ombudsman in June and July 2004, and its receipt was acknowledged on 19 July 2004. 3. The 2004/2005 policy expired at 4:00 pm on 31 March 2005, at which time the 2005/2006 policy incepted. 4. For present purposes, based on the special rule of attribution, the UCPT had become aware of LKA2 and its contents on 7 May 2004 or, at the latest, 16 June 2004, this being within the 2004/2005 policy period. Neither it nor any other insured under the policies gave notice of it or of its associated materials to Allianz during the period of the current policy. 5. The result is that, whilst during the remainder of the 2004/2005 policy, being from May/June 2004, the UCPT, the members of the School Council, the Headmaster or others, could have given notice of the facts to Allianz for the purpose of s 40(3), they did not do so. Their opportunity to do so ceased, at the latest, at 4:00 pm on 31 March 2005. It follows that s 40(3) could not operate to extend the policy to cover the claims which were subsequently made. Issue 3 – The UCPT'S knowledge 1. The third issue is whether the primary judge erred in failing to find, for the purposes of s 40(3), that the UCPT was aware of the contents of LKA2 in or around 2006 or 2007. As a result of the foregoing discussion, it is no longer necessary to consider this issue, but as full argument was heard and it concerns certain facts beyond those already dealt with, it should be dealt with. 2. This issue was addressed by the learned primary judge in Section F.2.4 of his reasons at [611] to [664]. In brief, he found that, despite the robust reporting regime in place throughout the UCA organisation and the fact that in mid-2004, LKA2 became known to the Headmaster and the School Council, neither the UCA nor the UCPT acquired any relevant knowledge of it until March 2009. A circumstantial case that LKA2 was provided to the UCPT 1. Allianz's alternative case on appeal was that, if the knowledge of Mr Weeks or the School Council was not attributable to the UCPT, it became aware of LKA2 by 30 January 2006 at the latest. This submission was said to be supported by inferences from the evidence of the practice of, and manner in which, the UCA annually sought information from the entities in its organisation for insurance purposes. In particular, that information-gathering regime specifically sought knowledge of facts from which claims of sexual abuse may be made in the future. Whilst there is no direct evidence of LKA2's being provided to the UCPT or the UCA, or some other relevant authority such as Uniting Resources, it was submitted that, in the circumstances, it was inconceivable that it would not have been notified by Mr Weeks or the members of the School Council. The factual foundation for the inference claimed 1. One possibly not insignificant feature in relation to this issue is the paucity of evidence as to the identity of the persons who constituted the directing mind and will of the UCPT at any relevant time; that is, as to the identity of the persons who constituted it or were its members over the several years relevant to the issues in contest. Therefore, it was not possible to identify the persons whose knowledge, at a minimum, was relevant. As such, it was difficult to identify any connections between the UCPT and other organs of the UCA, such as Uniting Resources, and their relevance. 2. It might be assumed that the UCPT may have been constituted in accordance with the UCA Act, and that its members included, at least, the Moderator, the General Secretary, the Property Officer, and five other variable appointees. 3. In support of its submissions in this respect, Allianz relied on the UCA's reporting guidelines for insurance purposes during the relevant period, and that they had been in place since at least 1999. Their specific sexual abuse reporting guidelines have been referred to above and their critical parts have been extracted. They showed a clear understanding of the need for reporting of such matters from all the UCA entities, and of its importance. Further, they emphasised the requirement that each of such entities make disclosure in relation to the matters of which they were aware. In addition, letters sent to the heads of those organisations, including that of 7 January 2002, impliedly recognised that those persons' knowledge of circumstances that may lead to a claim may well be relevant to cover under any policy of insurance. 4. The evidence also established an awareness of complying with the insurance sweeps was alive at the school level. The minutes of the School Council meetings show that it was regularly reminded of this and, for that purpose, it was provided with the relevant reporting guidelines and the pro forma insurance declaration forms. There are numerous examples of actual compliance, indicating that the insurance sweep requirements were being met. 5. Further evidence of such compliance appears from notifications which were made on 2 March 2000 by the then Headmaster, Mr Crawley, when he signed a document which stated the following: This is to certify that the names known for possible claims are: [AP15] Damien Vance [AP2] Christopher Fotis [AP9] 1. However, he then signed an insurance declaration on behalf of "Knox Grammar School (The Uniting Church in Australia)", stating that "there are no known claims or claims circumstances that have not as yet been reported to the General Secretary of the Synod". This was the second insurance declaration signed for that year, and it is reasonable to assume that it was signed after above reporting of those names had occurred. As the primary judge found (at [627]), Mr Piening passed the names of the identified persons onto Marsh on 24 March 2000. 2. In light of the specific reference made to identified suspects, the necessary inference can be drawn that the UCA entities and, particularly, Knox, took their reporting responsibilities seriously and were careful to comply with them. 3. It was not in dispute, and the evidence referred to by the primary judge (at [89] – [95]) shows, that shortly after the school's receipt of LKA1, it was reported to the UCA and then Marsh, and that it took place prior to the matter's being referred to the NSW Ombudsman. From this, it can be accepted that, if that relatively benign report was notified in accordance with the established protocols, it is likely that the rather more potentially dangerous LKA2 should also have been. 4. It is also apparent that issues relevant to insurance claims from the school were reported to the appropriate persons. The evidence shows that Mr Piening of the Finance and Property Board advised Mr Dennis of Marsh on about 29 March 2004 of the issues which were then arising out of Mr Wilson's investigation of Mr Nisbett that preceded the production of LKA2. 5. Allianz also relied upon the insurance proposal completed by Ms Patricia Gough (Office Manager) on behalf of Knox on 28 January 2005 concerning professional indemnity insurance. In it, it was asserted that no relevant person is aware of any facts or circumstances which may give rise to a claim of the insured type. It can be inferred that, in the circumstances that preceded that proposal, Knox had already provided appropriate notification. Were it otherwise, it would be expected that LKA2 would have been mentioned. 6. In the following year, Ms Gough (then the bursar of Knox) on behalf of the School signed an insurance declaration dated 30 January 2006, which declared: We confirm that there are no known claims or claims circumstances that have not as yet been reported to the General Secretary of the Synod. 1. This shows that the insurance sweeps were continuing and, in the absence of anything to the contrary, it can be inferred that they had been doing so continuously since at least 2000. 2. Those sweeps aside, the practice of reporting potential claims on an ad hoc basis was adhered to within the UCA and, especially, by those in charge of Knox. On 31 January 2007, Mr Oldmeadow sent an email to Mr Weeks, documenting a conversation he had had in relation to recent claims by TPC1 that he had been sexually abused by Mr Nisbett. He noted that his email was additional to one he had sent on 13 December to Mr Piening, in his capacity as the UCA "Insurance Representative". The email also noted that Mr Weeks had notified the Chairperson of the School Council, and also noted the agreement that, once Mr Weeks had notified the School Council, the Uniting Church and the Ombudsman, their reporting obligations in relation to the additional information would be completed. He further advised Mr Weeks that Mr Piening was retiring, that Mr Driscoll was taking over the role of arranging insurance for the Synod, and that he had informed him of the background to the matter involving TPC1. All this suggests that, outside the annual insurance sweeps, those in charge of Knox were assiduous at reporting matters relevant to potential insurance claims to relevant entities in the UCA organisation. 3. From these, Allianz submitted further that the absence of any reference in the insurance declarations as to the existence of LKA2 or the issues arising from it gives rise to the inference that notification of it must have previously been provided to the General Secretary, to Mr Piening, and/or to some other appropriate person. It was further submitted that given the seriousness of the issues revealed by LKA2, it should be inferred that the school would have treated it with the seriousness which it deserved. The primary judge's findings 1. The primary judge declined to draw the inference which Allianz propounded. Rather, he held (at [657]) that the inferences sought to be drawn were "contrary to the substance of the communications relied upon by the UCPT …, which demonstrate that in March 2009, the LKA Reports and Materials had yet to be provided to the UCA". He then considered those communications which suggested that the persons between whom they were made, save for Ms Blacker, were not familiar with LKA2 until then. An immediate difficulty with his Honour's conclusion is that the issue was whether the document had been provided to the UCPT, rather than to the UCA. Though the former was an entity of the latter, he did not accept for present purposes that the UCPT's knowledge was that of the UCA in its entirety. 2. Nevertheless, his Honour found (at [658]) that an email chain between Ms Blacker, Mr Oldmeadow, Mr Mein (UCA) and Mr Feehely (Uniting Resources) dated 17 to 20 March 2009 supported the conclusion that the UCA had not seen LKA2 as at that time. In that correspondence, concern was raised as to whether a "full copy" of the report (LKA2), or a "full copy of the full report", had been obtained. This was held (at [664]) to indicate that those persons (other than Ms Blacker) had not viewed the report as at the time of the writing of the communications. Difficulties with the primary judge's conclusions 1. There is difficulty in drawing these inferences, in particular, those in relation to the concern expressed in the emails as to the obtaining of a complete copy of the report. LKA2 is some 1,500 pages, consisting of the written report of Mr Wilson dated 7 May 2004, the Supplementary Risk Assessment Report also dated 7 May 2004, and the Investigation File, which amounts to two volumes of documents (printed on both sides). It also includes transcripts of the interviews with witnesses and other materials. There is, with respect, nothing in the correspondence suggesting that any parties to it had not seen Mr Wilson's written report or the Supplementary Risk Assessment Report. Had that been the case, it might be expected that some strong indication to that effect would have been given. Rather, the emails are distinctly concerned with obtaining a copy of the "full report" for the purposes of establishing a complete chronology of the events and a complete list of the potential claimants. This latter aspect was important to the UCA's need to notify Allianz of those persons in order to secure cover under the then current policy. 2. Again, the factual analysis required here is impeded by the lack of witness testimony as to relevant events which occurred, or even as to the circumstances in which correspondence was exchanged. It is possible that when LKA2 was originally circulated or given to the relevant persons, it consisted of only Mr Wilson's written reports. It is open that copies of the multiple folders of associated materials were not provided as well. A problem with that is that it falls well short of sufficient evidence for the drawing of an inference, and can be described only as speculation. Nevertheless, on the facts relied upon by Allianz, there is a basis for an inference that LKA2, but perhaps without the transcripts and other documents, was received by the UCA or the UCPT in or around June 2004. The UCA's well-entrenched system for notification of matters that may give rise to a claim and the annual making of insurance declarations, was undoubtedly followed by Knox. Its receipt of LKA2 was undoubtedly a very significant matter and more so than its receipt of LKA1, which had been duly reported to the appropriate persons. That LKA2 was not mentioned in the subject of insurance declarations in 2005 or thereafter is a reasonable indication that it had been appropriately notified during 2004. 3. Such considerations give rise to a sufficient inference that, in the ordinary course of the UCA's business, the existence of LKA2 and a copy of the report itself, was disclosed to the relevant entities within the UCA organisation at some time in or around June 2004. 4. On the UCPT's case that neither the existence nor the content of LKA2 was reported in accordance with the reporting guidelines, the natural question to ask is, why not? To that, no answer was provided. Moreover, there was no evidence from any party to the correspondence in 2009 concerning a copy of the full report. Indeed, no evidence was led on behalf of the UCA or the UCPT to counter the inference that naturally fell from the evidence of the efficacy of the UCA's internal reporting system: Blatch v Archer (1774) 1 Cowp 63, 65; Jones v Dunkel (1959) 101 CLR 298, 308, 312 and 321 – 322. 5. It can be added that the emails relied upon by the primary judge in his findings were temporally separated from the events of 2004 by some four years. Whilst it can be accepted that the report contained facts which, once read, would be difficult to forget, as he held, that does not mean that, by 2009, after much discussion must have taken place about the historical sexual abuse that had occurred at the school, some of the office holders may not have accurately recalled the occasion on which they had first become aware of LKA2, or what they had actually seen at that time. This is supported to a degree by reference to Mr Oldmeadow's email on 31 January 2007 which was prompted by TPC1's provision of additional detailed allegations of Mr Nisbett's sexual abuse of him. In that email, he referred to the fact that Mr Wilson had "fully documented all aspects of the incidents which the school has been able to uncover to date". That would be an unusual statement by a person in his position who had not read the report. Had he not done so, in the light of the extremely serious allegations then being made, it is beyond credulity that he would not then have sought a copy of it. 6. That aside, the better view is that described above, namely that it was very probable that the concern expressed in the emails in 2009 related to the obtaining of a full report including all associated materials, rather than Mr Wilson's base written report. 7. It follows that Allianz's submission that the primary judge erred in his conclusion (at [673]) that the UCPT was not informed of the existence and contents of LKA2 in around June 2004 should be accepted. It is probable that it was received by the UCPT (on the assumption that it is indistinguishable from the UCA Synod or Uniting Resources) around that time. 8. On this, it might also be observed that Mr Oldmeadow was a member of the School Council when the report was tabled at its meeting on 16 June 2004. As a matter of ordinary practice, the members of such boards are provided with the board papers at and usually ahead of meetings, and it can be expected that he would have received a copy in that way. Having received the report as a member of the School Council, he would also then know of it in his capacity as the Executive Director of the Board of Education, which was established as part of the Synod's administrative organisation and within the structure of the UCA. It is difficult to believe that the Board was not an appropriate repository for information for the Synod and the UCA in New South Wales about matters arising in UCA schools within the Synod's area. Though it may have been kept very private from outside knowledge, it is also difficult to accept that it would not have been discussed at the highest levels of the UCA. 9. Again, the analysis of this issue is impeded by the vagueness of the UCPT's position as the relevant insured. Whilst the primary judge considered the knowledge of Mr Oldmeadow and Mr Mein who, amongst others, were parties to the correspondence, there is nothing to indicate whether they were members or directors of the UCPT, or in any other position of control in relation to it. An email dated 19 March 2009 which was considered by the primary judge, was copied to the UCA's Moderator (who was required to hold a position on the UCPT), but the identity of the Moderator changed from time to time. In any event, it is not clear that that Moderator was in that position previously. Though his Honour finds from the emails that neither Mr Oldmeadow, Mr Mein, nor Mr Feehely had received copies of LKA2 and or the materials by 20 March 2009, its relevance is ambiguous since it is unknown whether their knowledge would be attributed to the UCPT. He made reference to the role of Uniting Resources, of which it seems that Mr Mein and Mr Feehely were part of; but there was no assertion by the UCPT whether their knowledge was relevant to the application of s 40(3) or Exclusion 7(c). Uniting Resources was mentioned only three times during the four-day appeal and, not at all, in any context where it or the knowledge of the persons who constituted it, was relevant to the issues. 10. It is apt to observe that Uniting Resources was referred to with some regularity in the UCPT's closing written submissions to the primary judge and it was there that it was submitted (at paragraph 575) that: From both a functional and structural perspective, having regard to the above overview, Uniting Resources was (and remains) the entity within the UCA with immediate responsibility for the obtaining of insurance on behalf of the UCA (By-Laws 8.2.1(d)). 1. That passage was adopted by the primary judge (at [667]) though, again, its relevance to the issues was unclear. When viewed from this distance, the UCPT's submissions to him were obscure and failed to provide clarity and precision where they were needed. 2. In the result, had it not been found above that the UCPT was fixed with the knowledge of the Headmaster and members of the School Council, it can, and should be found that the existence and operation of the UCA's robust reporting system is more than likely to have resulted in the notification in 2004 of the existence and contents of LKA2 to the UCPT, the UCA Synod, and any other party associated with the insurance cover at some time in 2004. Later notice of LKA2 in 2007 1. A further difficulty with the primary judge's findings in relation to LKA2 is to be found in that, whilst he concluded that the UCPT became aware of LKA2 only in 2009 at the earliest, as a result of the emails between various parties, he also found that the UCPT's agent, Ms Blacker, gave notice of the "problem" which arose from LKA2 to Allianz in 2007. That was said to have first occurred when she provided to Allianz a letter of advice in relation to TPC1's claim on 9 June 2007. His Honour had found (at [429]) that the so called "problem" revealed by LKA2 was limited to Mr Nisbett's conduct which had given rise to the complaint against him and was "inherently likely to give rise to further claims". He further held (at [430]) that Ms Blacker's letters of advice in June and November 2007, "were sufficient to engage s 40(3) for all claims that later came to be advanced by TPCs, and for any claims that may emerge from PTPCs involving allegations of sexual misconduct against Nisbett". 2. Whilst the findings of Ms Blacker's agency and the scope of her authority vis-à-vis Allianz were not challenged on the appeal, Allianz submitted that it was not possible for Ms Blacker, as the UCPT's agent, to give notice of facts or circumstances of which it was, itself, unaware or, at least, of which it was not taken to have been aware. In that respect, it was found (at [224], [309], [329]) that Ms Blacker had been engaged by both the UCPT and Allianz in relation to the actions brought by the TPCs and, particularly, TPC1. It was also found (at [333]) that she had Allianz's authority to receive notifications from insureds for the purposes of s 40(3), with the result being that her knowledge of LKA2 was imputed to Allianz, which then had notice of it. It was also found (at [414] – [415]) that she had inspected and considered the whole of LKA1 and LKA2 on 10 April 2007 when she attended at Knox. On 12 June 2007, she sent a letter of advice in a form similar to that sent to Allianz, to Mr Oldmeadow and Mr Driscoll, the latter of whom was then the Insurance Manager of the UCA. 3. It was not contested on the appeal that a solicitor engaged for an insured and insurer to defend claims from third parties, has or can have authority of the insurer to receive from the insured notice of facts or circumstances which might give rise to a claim for the purposes of s 40(3). In that context, the primary judge had found (at [428] – [429]) that the combination of the existence of LKA2 and the events which followed the making of a complaint in December 2006 by TPC1 of sexual assault committed by Mr Nisbett: 428 … had placed the historical information in the 2004 LKA Reports and Materials in a different light. Allianz had been notified that first, Nisbett was alleged to have committed a sexual assault against TPC1; secondly, the sexual assault took the form of an allegation of fellatio; thirdly, Nisbett was alleged to have been harassing and grooming TPC1 for a period of three years before the alleged sexual assault; and fourthly, TPC1 had informed the NSW Police and the police were attempting to locate Nisbett. 429 I accept that these matters taken together (as Ms Blacker records in her advices of June and November 2007) bespeak a "problem" concerning Nisbett's conduct at KGS that was inherently likely to give rise to further claims: Kauter (at 119 [31]). It is immaterial for the purposes of s 40(3) that the "problem" concerning Nisbett's conduct is described in general terms, or that the quantum, character or identity of claimants may be unknown at the date of the notification: DIF III (at [171]). 1. Based on these findings, Allianz submitted that Ms Blacker must also have become aware of LKA2 and of the problem revealed by it as the agent for Knox, the UCA and/or the UCPT. 2. That submission too should be accepted. There is a logical difficulty in the agent of Knox, the UCA or the UCPT having knowledge of matters within the scope of her authority to notify them to Allianz, and yet those insureds for whom she is also an agent, remaining ignorant of them. Based on the accepted scope of Ms Blacker's authority for the insureds, whether that be the UCA, the UCPT or Knox, she must be taken to have known of the facts as their agent and for them. That is supported by the declarations made by the primary judge where Ms Blacker's letters in 2007 were held to be notice in respect of all Mr Nisbett's misdeeds, as detailed in LKA2. The declaration states that notice of those facts occurred, "as soon as was reasonably practicable after the UCPT became aware of those facts". The necessary assumption for the declaration is that the insureds were aware of those facts shortly prior to notification. This was, as Allianz submitted, inconsistent with the UCPT only becoming aware of LKA2 sometime in 2009. 3. There was some slight dissonance in the primary judge's reasoning as to when the UCPT and Allianz became aware of LKA2 and its contents by reason of Ms Blacker's actions. His Honour seemed to conclude that they became aware of the matters on the receipt of Ms Blacker's letters of advice in 2007 concerning the potential liability of the school to the action brought by TPC1. However, if, as was found, Ms Blacker had authority on behalf of the UCPT and Allianz to give and receive notifications, it must have been her act in inspecting LKA2 and the associated materials on 10 April 2007, that would have fixed both with the relevant knowledge. Nevertheless, because her awareness of the facts and the sending of the letters of advice to her clients occurred in the same period of insurance and in temporal proximity to each other, little turns on this issue. 4. It follows that the learned primary judge erred in his conclusion that the UCA or the UCPT remained unaware of the fact of LKA2 or of its contents or of the problems which it revealed until 2009. 5. On the inferences made, if the insureds were unaware of LKA2 in 2004, they would have become aware of them at least in April 2007, and therefore, within the 2007/2008 policy period. Any cover in respect of any liability would then be under the policy then existing, if at all. Issue 4 – Allianz's conduct of the case at trial 1. The fourth issue raised is whether Allianz's conduct, in relation to both its dealings with the UCPT and the manner in which the trial occurred, precluded it from advancing the case which it sought to make on appeal. The UCPT's particular complaint was Allianz's alleged change of position with respect to the nature and effect of LKA2 and its associated materials. The nature of the issue raised 1. The UCPT submitted that, prior to Allianz's first declinature in 2014, it had dealt with it in relation to the claims made by former Knox students as if it were the relevant insured under the policy and was bound to indemnify it in respect of those claims. Further, Allianz had done so despite its awareness of LKA2, and had continued to do so since 2007 when Ms Blacker had become aware of it and had provided letters of advice based upon it. Thereafter, it had recognised the UCPT as the insured against whom the claims had been brought, acknowledged the making of bulk notifications by it, and had cooperated with it in dealing with the insureds through the claims-handling intermediaries. It submitted that it was only after Allianz became aware in 2011 that the UCA was seeking tenders from the market for its future insurance needs and that it subsequently placed insurance with another entity, that its position in relation to LKA2 changed in that it began declining indemnity. 2. A particular matter relied on in this respect was that Allianz had accepted that notification had occurred of potential claims by a number of former students, but that it has subsequently alleged that such notifications were not valid. An instance of that was the notification of the claim of TPC3 which was contained in an email on 10 June 2009 from Ms Susie Barker of Claims Management Australasia to Ms Blacker and Mr Karl Adra of Allianz, and which attached a letter from the claimant's solicitor. In his response, Mr Adra confirmed that the claim had been notified on 31 March 2009, and that he had instructed Ms Blacker to respond to the solicitor's letter. The primary judge held (at [472]) that "Mr Adra's confirmation was an acknowledgement by Allianz that the UCPT (by means of the first bulk notification) had notified facts that might give rise to that claim against it for the purposes of s 40(3), as TPC3 was a person identified in that letter as a potential claimant". 3. It was further argued that another instance of this occurred in relation to the claim made by TPC6. On 24 November 2009, an email was sent to Mr Adra, attaching a letter from TPC6's solicitor indicating that they held instructions to commence proceedings against Knox in relation to assaults allegedly committed by two teachers. In response to that email, Mr Adra indicated that indemnity was granted and that notification of facts from which the claim might arise had been given in the first bulk notification as the claimant's name was on the list of persons notified on 31 March 2009. Mr Adra, who had received a list of some 85 names as at February 2010, had advised the UCPT's claim managers to the effect that "as a Knox claim emerges", he "checks" or "peels" it off the list of names received and opens a new claim. 4. The UCPT submitted that the above was, in general terms, Allianz's modus operandi for dealing with claims against Knox as they emerged over a period of time and, importantly, after it had become aware of LKA2 and its contents. Other examples of similar conduct were referenced by the primary judge in his reasons at [185], [508], [512], [519] and [522]. 5. It was also submitted that, notwithstanding Allianz's knowledge of LKA2 as at April 2007, it renewed the UCA's policy on several occasions and continued to accept that notification had previously been given of claimants whose claims were subsequently made. 6. In these circumstances, it referred to Allianz's first indication that it might decline cover. In February 2011, the UCA's insurance broker advised Allianz that the UCA was going to the market to seek tenders in relation to its insurance needs. Following that, it purported to make a further bulk notification of names of teachers in respect of whom claims might be made. On 3 March 2011, Allianz wrote to it advising that the bulk notifications were not effective as there was no specification of the surrounding circumstances, or what might cause the UCA to identify the persons as potential claimants. The specific issue arising from Allianz's previous claims handling 1. The specific point sought to be made by the UCPT was largely a rhetorical one and to the effect that Allianz's current position as to the import of LKA2 is inconsistent with its prior conduct. It submitted that the colour and relevance which Allianz now seeks to attribute to LKA2 has been exaggerated so that it might avoid liability for the numerous claims which have emerged. The UCPT relies on similar conduct in relation to estoppel and election, topics that are considered later in these reasons. Allianz's alleged changed position does not limit its case on appeal 1. To the extent that Allianz's motivation for its refusal to indemnify is relevant, there is insufficient material to establish that its present position is disingenuous, rather than one which emerged following a genuine re-evaluation of the circumstances which had been more clearly revealed, specifically, the timing of the receipt by Knox of LKA2. The UCPT's aspersion of Allianz's claim that it was not fully aware of the circumstances of LKA2 and the insureds' knowledge of it by the relevant insured until around 2011, was itself slightly disingenuous. After all, it had claimed that although LKA2 was received by Knox in 2004 when it was tabled at the School Council meeting, the relevant UCA entity was not suitably aware of it until 2009. This was maintained despite that Mr Oldmeadow, the Executive Director of the UCA's Board of Education, was a member of the School Council when the report was tabled. In circumstances where, even as at the time of the hearing of the appeal, the UCPT was apparently unable to explain how it was that LKA2 did not become known to relevant persons within the UCA until sometime in 2009, it is dubious to suggest that persons outside its organisation might have had a better knowledge of it. 2. Nevertheless, the real difficulty here is that its point is that the Court should not accept Allianz's present characterisation of LKA2, because it has previously dealt with the UCPT on the basis that it was largely irrelevant to the respective rights and obligations under the policy. That proposition relies on the assumption that Allianz had actual knowledge of LKA2 and its contents and, in that respect, the UCPT refers to the primary judge's finding that, for the purposes of notification under s 40(3), Allianz had knowledge of it when Ms Blacker became aware of it. However, his finding is concerned only with imputed knowledge for the purposes of determining the rights and obligations under the policy. There is no evidence that Allianz was actually aware of LKA2 and its contents until after 2012. Certainly, it had been referred to obliquely in Ms Blacker's letter of 27 November 2007, but there is nothing to suggest that Allianz had seen it or read it prior to late 2013, after which time it commenced to decline indemnity. 3. Though for some purposes Allianz is fixed with Ms Blacker's knowledge, whether it is taking an unmeritorious position in relation to the nature of the contents of LKA2, is not one of them. It was only when it received a copy of LKA2 and it was examined in detail, that its position changed about its impact on the relationship between it and the UCA. Its conduct in this respect does not undermine the veracity of the manner in which it advanced its case on appeal. 4. Further, for the purpose of suggesting that, in the appeal, Allianz is overstating LKA2's relevance to the issues between the parties, the UCPT also relied on the fact that Ms Blacker did not give advice to Allianz about the relevance of LKA2 to its entitlement to decline indemnity as it now seeks to do. However, she was the solicitor for the UCPT involved in defending the third-party claims and there was no evidence that she had any overriding obligation to advise Allianz of its entitlement to decline indemnity. Additionally, there is nothing to indicate that she was in a position to provide that advice. To have realised that recovery under the policy may have been compromised by LKA2, she needed to have understood the UCA's structure and appreciated the connection between the UCPT and the school, and how it was liable for the loss sustained by TPC1 (something that its senior counsel was unable to adequately do). She would also have had to know that Allianz had not been informed of LKA2 or its contents. Further, on the one hand, the UCPT submits that LKA2 is benign insofar as it relates to the rights of the insureds but, on the other, says that Ms Blacker was somehow required to see something more malign in it. Her consideration of it and its materials was directed to the defence of TPC1's claim. It is not possible to infer that she must have considered issues that could imperil the scope of the policy's cover. 5. There is also a want of evidence of the terms of her retainer, though it is apparent that she was then acting for both Allianz and the insured in defending TPC1's claim. It is going far to suggest that, if while defending the UCPT, she became aware of information which might defeat its entitlement to indemnity, she should have acted contrary to its interests and advised the insurer that it could deny liability. Though it might be accepted that a retainer from insurers in such circumstances often include terms permitting that to occur, there is no evidence that it did on this occasion. 6. Neither LKA2 nor its contents were disclosed by the UCPT to Allianz when received, though it cannot be seriously doubted that its relevance would have been appreciated by it and many in the UCA. Eventually, according to the primary judge's findings, it was disclosed in an oblique or indirect manner by the UCA by informing the solicitor defending the school from TPC1's claims that there were documents at the school which may have held useful information. It is likely that its disclosure in that fashion concealed its impact on the insured's entitlement to cover, and it was not until a copy was eventually received by Allianz that it was considered by those in its organisation whose duty it was to address the insured's right to indemnity. Issue 5 – Whether LKA2 limits the scope of the UCPT's right to indemnity 1. This next issue concerns the extent to which the knowledge of the relevant parties of LKA2 defeats the UCPT's cover under policies issued following the expiry of the 2004/2005 policy (which provided the cover during the year in which the UCPT became aware, or is taken to have become aware, of it). In particular, it is the effect of the above findings on the operation of s 40(3). 2. The present discussion follows from those findings made in respect of the earlier matters and, especially, the finding that the information in LKA2 and the materials associated with it revealed the existence of potential claims, a "problem" or "hornets' nest", which largely coincided with the matters Allianz submits were raised by it. 3. Had LKA2 been notified to Allianz during the period of the 2004/2005 policy year, that policy would, subject to the policy sub-limits, have responded to all subsequent claims of sexual abuse. The failure to give such timely notice has the consequence that the benefit of s 40(3) was lost. That year's policy was not extended by the statutory intervention, and subsequent claims which can be said to have arisen from the problem revealed by LKA2, were not covered by it. 4. On the other hand, the non-triggering of s 40(3) did not alone limit the operative effect of future policies and it is necessary to consider their terms, in particular, Exclusion 7(c) to determine whether their cover was excluded for claims which arose out of prior known circumstances. 5. The scope of this is greatly diminished as a result of the above finding as to the revelatory nature of LKA2. Had a different conclusion been reached, it would have been necessary to undertake an analysis of the facts of which the relevant insured became aware in each particular policy year and whether or not they were notified to the insurer. Issue 6 – The operation of Exclusion 7(c) 1. The sixth issue in the appeal is whether the primary judge ought to have found that the information in LKA2 and the associated materials recorded a claim, fact, circumstance or occurrence that may give rise to a claim for the purposes of Exclusion 7(c). To some extent, that will depend upon the construction of the exclusion. The UCPT submitted that it ought to be so construed that the central concept of the potentiality of a claim being made should be read stringently so as to reduce its scope. The essence of that submission was that, for Exclusion 7(c), the known claims, facts, circumstances or occurrences, must point more strongly towards a potentiality of a claim than that required for the cognate concept in s 40(3), so the beneficial, purposive approach accorded to s 40(3), will be excluded from the construction of Exclusion 7(c) as advanced by Allianz. The construction of Exclusion 7(c) Obliteration 1. The UCPT's first submission as to the scope of Exclusion 7(c) was that, unless it is read down, it would either obliterate or substantially reduce the cover provided in the policies. That submission both misstates and overstates the position. Section 40(3) and Exclusion 7(c) are, in effect, complementary in the sense that the first is a necessary mollifier of the latter, and is especially integral to successively renewed "claims made" policies to prevent undesirable gaps in coverage. If, during the term of a policy, the insured becomes aware of a relevant fact or circumstance and gives the insurer notice of it, they derive the benefit of the s 40(3) extension to the then current policy. Whether the extension occurs is a matter over which the insured has control. However, a clause such as Exclusion 7(c) in a subsequent policy, excludes cover for claims arising from facts known before the policy's inception. Conversely, s 40(3) applies only to facts that become known during the policy period and brings them within cover if notification is given. This avoids the unfortunate consequences of insureds learning of potential claims during the period of cover. This does not suggest that the interpretation of the concept of "facts which might give rise to a claim" should be any different from the manner in which the cognate concept is considered for s 40(3) as the UCPT submitted. On the contrary, it bespeaks of a need for a consistent and common approach. 2. Adopting the same approach to their construction would not obliterate or substantially diminish the policy cover. In the first place, whether cover under an existing policy is extended depends upon whether the insured gives appropriate notification. On the assumption that no notice is given, it may be that no claim in relation to the known facts emerges in the following insurance period, with the result being that the subsequent policy's coverage is relevantly unaffected by a clause such as Exclusion 7(c). In addition, the subsequent policy will cover all claims which arise from facts which were hitherto unknown. 3. The UCPT's submission relied upon the observations of Buss P in Fitzpatrick v Job & Job t/as Jobs Engineering (2007) 14 ANZ Insurance Cases ¶61-731, where his Honour held (at 76,076 [264]) that the term "professional" in the indemnity clause of a professional indemnity policy, does not necessarily bear an identical meaning in an exclusion clause of a public liability policy. That, with respect, is plainly correct but, it is merely a consequence of the need to construe words in policies of insurance in their particular context. As a general principle it has been applied subsequently, including in Vero Insurance Ltd v Power Technologies Pty Ltd (2007) 14 ANZ Insurance Cases ¶61-745, 76,336 [147] – [148], where to have given the words of an exclusion some equivalence to the words used in the primary cover would have defeated the policy's commercial purpose. This was also applied in substance in Major Engineering Pty Ltd v CGU Insurance Ltd (2011) 35 VR 458, 472 [58], but again, there only because the adoption of the same meaning of the expression would defeat the purpose of the policy. Finally, reference was made to Weir Services Australia Pty Ltd v AXA Corporate Solutions Assurance (2018) 20 ANZ Insurance Cases ¶62-175, 76,599 [125], where the same principle was applied for basically the same reason. 4. No feature of that nature arises here. The exclusion of cover for potential claims known prior to the inception of the policy does not touch in any way an extension of cover to potential claims that become known and are notified during the policy. 5. Further, there is, for instance, no relevant exclusion relating to liability arising from the sexual abuse of students at the UCA's schools. Were such an exclusion to have existed, it might have been necessary to read it down in some manner if it would otherwise have the effect of denying one of the major purposes of the policy. Here, Exclusion 7(c) is not related to an element of the cover or a purpose of the policy, but only to the insured's knowledge of circumstances which existed at the time of the policy's inception. Indeed, for the reasons given, the exclusion did not interfere with the additional cover effected by s 40(3). 6. Substantively, s 40(3) and Exclusion 7(c) are merely corresponding descriptions of the policy's cover in certain respects and define the conceptual limitations of that cover in relation to existing circumstances that subsequently give rise to the insured's liability. Importantly, the application of the same interpretive techniques to the construction of the known facts and circumstances exclusion, promotes the giving of prompt notice of potential claims and "avoids stacking the limits of successive policies to cover essentially the same or very closely related claims": Desmond Derrington and Ronald Ashton, The Law of Liability Insurance (LexisNexis Butterworths, 3rd ed, 2013) 1877 – 1878 [10-36]. So, in this case, the prompt notification of the "problem" or "hornets' nest" revealed by LKA2 in 2004 when received by the School Council, would have extended cover under the current policy to all related claims and that cover would not have been disturbed by the exclusion relating to potential claims known before the current policy period. It may be that the relevant policy limit or sub-limit would not accommodate all those claims, but that is merely the result of the limits agreed upon between the parties. Nevertheless, the operation of s 40(3) requires prompt notification and, here, the UCPT omitted to give notice, either promptly or at all. 7. It can be accepted that if, prior to entering a contract of insurance, an insured is aware of a claim, fact, matter or circumstance that might give rise to a claim and fails to disclose it, such omission may well constitute a breach of the duty of disclosure in s 21 of the ICA, since it is likely to be a matter of which the insured and a reasonable person knows or would know to be relevant to the insurer's decision to accept the risk and on what terms. It is likely that, if in accordance with their disclosure obligations, the fact was disclosed, the insurer would, in any event, exclude cover of any claim arising from that fact which does materialise. It necessarily follows that the potentiality of Exclusion 7(c) to cut down the scope of cover is further reduced. 8. For these reasons, the UCPT's submissions on this topic are unacceptable and should be rejected. Parallel constructions 1. It is correct that obscurity in exclusion clauses will be read against the insurer but, otherwise, no special approach should be taken to the construction of exclusions. The following passage from Derrington and Ashton, The Law of Liability Insurance (LexisNexis Butterworths, 3rd ed, 2013) 1840 – 1841 [10-14] identifies the orthodox approach to be taken in the construction of exclusion clauses: That an exclusion should be clearly worded and conspicuously displayed is not to say that there should be any departure from the basic rule that the words used should have their ordinary meaning, read in the policy's context and having regard to the purpose of the policy and of the exclusion. Subject to what follows, an exclusion should be construed in the same manner as the operative covering clause, since it is an exception to it; but because of its different purposes, an exclusion may be construed differently from a limitation in the insuring clause which may appear to have a similar operation. 1. Support for that proposition can be gained from the decision of the Supreme Court of Canada in Stolberg v Pearl Assurance Co Ltd [1971] 19 DLR (3d) 343, 346 – 347 which was applied by White J in Re FAI General Insurance Company Limited v Fletcher Construction Australia Limited (1998) 10 ANZ Insurance Cases ¶61-403, 74,430 – 74,431. 2. There is further support for reading the "known circumstances" exclusion in this manner. Both principle and public policy reject the notion that, except in special fully informed agreements, a party can insure against liability arising from circumstances privately known prior to the policy's inception and it is well-established that insurance should be confined to future fortuitous contingencies. 3. It follows that there is no reason why the same or substantially the same principles should not apply for construing clauses such as Exclusion 7(c) as they do to any contractual or statutory extension in relation to known circumstances, such as where the fact, matter or circumstance in question signifies a problem, in the sense of a "hornets' nest" or a "can of worms" type circumstance: Kajima UK Engineering Ltd v Underwriter Insurance Co Ltd [2008] EWHC 83 (TCC) [99]; Euro Pools at 600 [32], 601 [39]. 4. Further, despite the UCPT's submissions on the construction of Exclusion 7(c), very little was advanced as to how it might be construed otherwise so as to negate the operation which arises from its broad wording. Even on a more stringent construction, it is difficult to see how its operation would be limited given the circumstances under consideration. The known facts on which Exclusion 7(c) operates 1. It follows from the above findings as to the facts revealed by LKA2, that Exclusion 7(c) operated to exclude potential claims that were easily recognisable from it, as have been identified above. 2. The relevant "Insured" for the purpose of Exclusion 7(c) are those within the scope of the policy coverage under which the claim for indemnity is made. Necessarily, that includes the UCPT which, given the findings made, had the relevant knowledge on which the exclusion will operate. It also includes the School Council, by itself or by the Headmaster, and the Headmaster as an insured himself, in respect of any claim arising in respect of their liability. The operation of Exclusion 7(c) in this case 1. As Exclusion 7(c) is not avoided, Allianz is entitled to reject all current and future claims for sexual abuse of students at Knox by teachers or masters in the period between the 1980s to 2004. Though, on the appeal, Allianz sought declarations to that effect, there is no need to make any such orders as the dismissal of the action suffices to protect its interest and, it should be noted, there was no cross-claim or cross-appeal seeking that relief. 2. For claims in relation to the conduct of Mr Nisbett, the position is straight forward. His offending against numerous boys was expressly documented in LKA2 and the claims now made against the school arose from the known circumstances. 3. In relation to the claims which have been made or, as yet, unmade in respect of the conduct of Mr Treloar, Mr Stewart, Mr Vance, Mr James, Mr Barratt and Mr Fotis, the position is less straight forward. They arose from the broader "problem" revealed by LKA2, as to the historic sexual abuse by teachers and masters and in an environment where such conduct was able to occur without adequate consequences. It was not necessary to knowledge that claims may be made, that neither the identity of the specific teachers nor the identity of the specific students were known. That can even be said of Mr Fotis, though there was no specific direct evidence against him referenced in LKA2. 4. It follows that the UCPT and, more precisely, the relevant insureds for whose conduct the liability arose, knew of the facts from which the claims arose in the 2004/2005 policy period. By reason of Exclusion 7(c) in the subsequent policies issued by Allianz, those policies will not respond to any claims made. Were the facts of a character that may give rise to a claim? 1. An issue arose as to whether there should have been a perception of a likelihood of any claims' being made, given the absence of any prior complaints having been made. The absence of such claims is relevant context, but the foreseeability was limited to the low bar of possibility rather than likelihood. It was likely that tortious conduct had been committed on multiple occasions over an extended period; and that many, if not all of the persons affected had suffered harm as a result. This was enough to convince a reasonable person of a real potential for at least some claims. This was not a case of there being doubt about whether all elements of a cause of action had occurred. Indeed, LKA2 disclosed a likelihood of the causes of action being complete and the only real question would be the quantum of the claims when made. That would depend on the extent of damage suffered by the individuals. In any event, as the issue here concerns facts which may give rise to a "claim" as opposed to a "liability", it would not matter whether any claim made would be successful or sound in an award of damages. The question is whether the making of a claim was a "possibility", rather than a "probability". 2. Given the force of the implications in the information in LKA2, the absence of any contemporaneous complaint is not significant. It is notorious that victims of sexual assault are frequently embarrassed by an unwarranted feeling of shame and, for a time, are reluctant to report it. That is often overcome when some other person makes a similar complaint. Once one person makes a complaint, other victims may then follow. It is also a matter of human experience that when sexual abuse is perpetrated upon children by someone in a position of authority, the offence may go unreported for many years, but when the victim reaches adulthood, the nature and seriousness of the offence is better understood by the victim, who is then mature enough to take action. 3. With respect, the learned primary judge fell into error in his assessment of the effect of LKA2. His reliance on the absence of a contemporaneous complaint in diminishing the prospect of any person coming forward with a claim after two decades was excessive in degree. There was no apparent foundation for the conclusion that because no claim had been made for two decades against the teachers at Knox that the possibility of any such claims being made was remote. Although it may be impermissible to consider the myriad claims which were subsequently made in ascertaining whether LKA2 indicated the possibility of a claim or claims being made, it is relevant to the assessment of the learned primary judge's finding. In the absence of support for the conclusion that the making of claims was unlikely, some consideration would have to be given to how that conclusion could be maintained when numerous subsequent claims were in fact made. It is difficult to agree with the proposition that, in these circumstances, such a delay gave real support to a conclusion that there was no reason to anticipate the possibility of a claim being made, in the light of those subsequent claims. It may well be that the subsequent police action and consequent publicity encouraged others to make claims as they did, but that did not alter the possibility of whether they would be made at the time LKA2 was delivered. 4. It is also undoubted that the claims which have been made did, in fact, arise from the problem revealed by LKA2. As such, any such claims are beyond the scope of cover afforded by the policies. Issue 7 – Is Exclusion 7(c) void? 1. The seventh issue arises from the UCPT's submission that Exclusion 7(c) is void or unenforceable by reason of its inconsistency with ss 33 and 52 of the ICA. If that is correct, the UCPT and/or the School Council and Headmasters will be entitled to indemnity in respect of the claims made, despite their knowledge prior to the inception of the policies in question of the facts and of their potential for claims from which they arose. The impact of s 33 of the ICA 1. For present purposes, it is only necessary to set out s 33, which provides: 33 No other remedies The provisions of this Division are exclusive of any right that the insurer has otherwise than under this Act in respect of a failure by the insured to disclose a matter to the insurer before the contract was entered into and in respect of a misrepresentation or incorrect statement. 1. In the course of its submissions, the UCPT identified that, until Allianz filed its opening submissions on the appeal, it had advanced a case under ss 21 and 28 of the ICA in addition to its Exclusion 7 case. That is, it relied upon the UCPT's material non-disclosure to defeat its claim. The UCPT invoked Allianz's alleged reliance upon the same particulars of non-disclosure for its defence based on ss 21 and 28 of the ICA, as it did for its defence based on Exclusion 7(c), as showing that the latter defence is essentially one based on non-disclosure and, therefore, a prohibited attempt to contract out of the ICA or to extend the remedies provided by it. So, the submission went, Allianz was unable to rely upon ss 21 and 28 of the ICA because it could not establish that it had suffered any prejudice from the non-disclosure and, therefore, it could not rely on Exclusion 7(c), as that would have the effect of wrongfully extending the remedy for non-disclosure provided for by s 28(3). It further submitted that the remedy which Exclusion 7(c) purportedly affords Allianz is the wholesale denial of cover in circumstances where, under s 28(3) of the ICA, its remedy would be limited to reducing its liability to the extent of its prejudice. As s 33 provides that s 28(3) is the exclusive remedy for non-disclosure, Exclusion 7(c) directly conflicts with it and is void or unenforceable. 2. A similar submission was that Exclusion 7(c) contravenes the prohibition against contracting out of the ICA as provided for by s 52, because it has the effect of excluding, restricting or modifying the operation of s 28 to the prejudice of the UCPT. That will be dealt with separately in these reasons. 3. Central to the UCPT's principal submission is the proposition that the statutory regime provides a code for the non-disclosure of information by an insured prior to a policy's commencement, and that any circumstance which involves those circumstances must be dealt with under the code. Any policy provision that purports to apply in that case is rendered void by s 33 or s 52 of the ICA. 4. This same contention was the subject of some comment in Macquarie Underwriting Pty Ltd v Permanent Custodians Ltd (2007) 240 ALR 519. In that case, the policy in question contained an exclusion which provided: 4.1 We will not cover You for any Claim or claim: … • arising from circumstances of which You were aware prior to the Insurance period and which You, or a person in Your position, ought reasonably to have realised to be circumstances which might result in a Claim or claim. 1. Though expressed as an exclusion, this clause was self-evidently one which tailored the scope of cover expressed in the insuring promise, a common function of exclusions. The submission was made that, in substance, it was a non-disclosure provision and to the same effect as s 28 of the ICA, which imposes limitations as to the impact of non-disclosure on the insured, with the consequence that the exclusion could not stand in the face of s 33. Two members of the Court (Allsop and Buchanan JJ) expressed, obiter, (at 524 [28]) the view that it was arguable that the exclusion could be so characterised as to contravene s 33. Their Honours said: In cl 4.1 the insurers are attempting to exclude from cover matters which would otherwise be disclosable. The aim may be readily seen to be definitional, but it is arguable that s 33 is engaged. That is not a final conclusion. 1. Reference was made also to the observations in David Kelly and Michael Ball, Kelly and Ball Principles of Insurance Law (LexisNexis, subscription service) at 14,271 – 14,273 [14.0170], in relation to the issue of cover for liability arising from facts known to the insured prior to the policy's inception. Consideration was given to the decision of Dumford J in Pech v Tilgals (1994) 28 ATR 197 (Pech v Tilgals), where it was held that a clause which excluded liability for claims arising out of circumstances known to the insured prior to the entry into the contract was not void by reason of s 33 and any alleged effect of the operation of s 28. His Honour recognised that the coverage clause did not operate on the non-disclosure of facts as was the concern of s 28. The learned authors summarily reject Dumford J's reasoning and assert that a clause of the nature under discussion would nonetheless affect the operation of s 28 and, for that reason, would be rendered void by s 52 of the ICA. This conclusion is addressed below. 2. As for the operation of s 33, Kelly and Ball say (at 2706 [2.0320.35]): That provision has generally been read as simply making it clear that the remedies stated in Div 3 are exclusive of any other right that the insurer may otherwise have had under the contract or any other law for a breach of the duty of disclosure or a misrepresentation or incorrect statement. … 1. Thereafter, they identify that the Hon JC Campbell KC in 'Unenforceable exclusions in travel insurance' (2018) 29 Insurance Law Journal 71, has sought to afford s 33 a more "creative role". In particular, Mr Campbell KC focuses on what he identified as the inconsistency between the wording of s 28, and that of s 33. The former was said to operate if "there has been a failure to comply with the duty of disclosure", and the latter if there has been "a failure by the insured to disclose a matter to the insurer". From this, it was said that the effect of s 33 is wider in relation to non-disclosure than s 28, and the former operates where there is a failure to disclose, regardless of whether the failure was in relation to a duty to disclose. His conclusion is: In other words, in circumstances where some matter has not been disclosed, but there was no statutory duty to disclose that matter, if there is a provision in the contract that purports to give the insurer a right to refuse the claim or to not pay it in full and that right exists or arises in respect of the failure to disclose, the right is ineffective. 1. The proposition so advanced is that, where the scope of the policy is defined, in part, by reference to matters which were within the insured's knowledge prior to the policy's being entered into, such as in the case with Exclusion 7(c), and the insurer relies on that clause to decline indemnification, it exercises a "right" in respect of a failure of the insured to disclose a matter to the insurer. On that basis, the exclusion or definition of the policy's scope of cover would be "ineffective". 2. Kelly and Ball suggest that this proposition, based on the difference in the wording between s 28, "failure to comply with a duty of disclosure", on the one hand and s 33, "failure of the insured to disclose", is not sustainable. They recognise that the dissonance in the wording of the two sections may be merely a matter of drafting, and that it is unlikely that it was intended to create any difference. Moreover, for the purposes of the type of exclusion under consideration, whether a matter was or was not disclosed is not in any way related to the duty to disclose. As the authors noted, s 33, like s 28, is positioned in Div 3 of the Act which is headed, "Remedies for Non-disclosure and Misrepresentation by the Insured", and are self-evidently limited to the insured's conduct which would constitute a breach of a legal or contractual duty of disclosure. In that context, the word "failure" is intended to connote the same idea of a falling short of that statutory or contractual obligation. There is no indication that s 33 was intended to have a wider operation. Here the insurer's right is found only on the former known facts and circumstances with the potential for a claim, whether they were disclosed or not. The insured purchases cover having that limitation. If the legislation intended otherwise, it did not say so. 3. With due respect to the thoughtful propositions advanced by Mr Campbell KC, the preferable construction of s 33 is that it is expressly limited to provisions that enable declinature of cover on the ground of non-disclosure. It does not purport to limit an insurer's right to formulate the express scope of its risk. The manner in which that has been traditionally undertaken, whether in relation to property damage or liability right to articulate a broad area of coverage which is then tailored to the agreed limits by the use of exclusions. That practice, which developed organically, is, it should be observed, infinitely superior to attempting to articulate policy coverage by the impossible task of attempting to articulate each and every specific risk. 4. Nothing in the Australian Law Reform Commission, Insurance Contracts, Report No 20 (1982) (hereinafter, the "ALRC Report"), suggests that s 33 is intended to reduce an insurer's ability to limit the risks which it is prepared to accept and to which an insured agrees when entering the policy. There is much in Chapter 7 of the report concerning non-disclosure prior to entry into the policy and the limitation of an insurer's right to deny liability on that ground, save to the extent that it suffers detriment, but there is nothing that suggests a radical change to a right to define the scope of coverage. As the report and its annexure were the blueprint for the ICA, it is not difficult to transpose the lack of any mention in the report of such a substantial departure from the insurers' established practice of risk definition to a corresponding absence of it in the ICA. The alternative view would necessarily require the conclusion that in the ICA the legislature, by a silent side wind, abolished important insurers' rights. 5. As an aside, there appears to be a growing trend in recently decided cases to assume that the purpose of a policy of insurance is determined solely by reference to the insuring clause, without reference or association together with the exclusions and other limitations. That, with respect, would be wrong and contrary to principle. The policy terms are to be read together and as a whole without an assumption as to dominance of the insuring promise and inferiority of status in those provisions that are intended, usually expressly so, to modify it. 6. The reductions to the scope of a broadly stated cover are not peripheral or incidental to the policy's object. On the contrary, they are essential to the articulation of cover and to the scope of the risk which the insurer is prepared to accept for the premium charged. The arguments to the contrary seemingly assume a staggered contract formation, being one which commences with the broad areas of cover and, once entered into, that cover is somehow altered by reasons of the exclusions. That ignores the fact that the reality of the scope of the cover offered by an insurer is defined by the stated exceptions. In the present case, the cover offered did not extend to claims which arise directly or indirectly from any claim, fact, circumstance or occurrence of which the insured was aware before the commencement of cover, which may give rise to a claim. Here, the UCA with the assistance of its broker, Marsh, accepted that cover as formulated, and no conduct on its part in relation to the disclosure of information would alter it. 7. The second argument advanced by Mr Campbell KC is based on an alleged purposive construction of s 33, and to the effect that unless the section is read widely, the scheme in the ICA which modified the duty of disclosure could be avoided by contractual drafting techniques. In his article, Mr Campbell KC then articulates the terms of an exclusion clause which, he says, would exclude liability in relation to claims arising out of a failure to disclose material facts. Whilst there may be some risk that insurers may try to include such clauses, it is not irrelevant that in the nearly 40 years since the enactment of the ICA, no such provisions have appeared, at least to the extent that they have been litigated. It is also beyond a purposive construction of s 33 to read the words "any right that an insurer has … in respect of a failure by the insured to disclose a matter", as extending to the right to rely upon the scope of cover agreed between it and the insured. To the extent that there exists a "right", it is merely to deny that the insured's claim is not within the policy cover. In any event, is not conditioned upon whether the insured did or did not disclose a matter. 8. The proposition that such exclusions are rendered inoperative by reason of s 33 (or s 52, which is addressed further below), seems to assume that the insurer should prima facie be expected to cover claims arising from facts, occurrences or circumstances of which the insured was aware prior to the policy's inception, and in respect of which a reasonable person would regard as possibly giving rise to a claim. Again, that is contrary to the historically held understanding that insurance generally provides cover for fortuity. The UCPT's proposition also assumes that claims within the scope of a general insuring clause should be covered unless, pursuant to s 28(3) of the ICA, the insurer can establish that they would not have provided cover in respect of them had the facts from which they arose been identified prior to entry into the policy. The logical conclusion of that is that the insurer would be obliged to widen the promised cover substantially, subject to its ability to establish a counterfactual. Again, that inverts the traditional relationship between the insurer and insured. If the insured duly discloses the relevant fact, matter or circumstance prior to the insurer's agreeing to insure, the insurer can calculate the risk and agree or not to assume it and set an informed premium. In such circumstances, there is certainty in relation to whether the insurer would provide the cover. One does not have to undertake a historical and, necessarily less accurate, ex post facto hypothetical assessment of the circumstances at the time the policy was entered into, to identify what it might have done. It is self-evident that such a retrospective analysis is prone to inaccuracy but, on the broad application of s 33, it is one which the insurer would be required to do in relation to any claim which arose out of a prior known circumstance. 9. The UCPT further submitted that the better construction of s 33 is to construe the word "right" where it appears in the expression, "exclusive of any right that the insurer has otherwise than under this Act in respect of a failure by the insured to disclose a matter", in a beneficial and purposeful manner. By doing so, the "right" should be disassociated from the expression, "in respect of a failure by the insured to disclose a matter", and refer to any right to refuse to pay a claim for any good reason. In this way, it was argued, where the policy does not cover a claim because the insured was aware of a fact, occurrence or circumstance from which the claim might arise, the "right" of the insurer to rely upon the agreed coverage under the policy, is a right within the scope of the section. Read in that manner, the section would be directed to preventing insurers from exercising rights other than those that arise under the Act in the specified circumstances, as appears in the present case. 10. Necessarily, not only would such a construction vastly expand the section's operation and be inconsistent with the words used in s 33; but as explained above, it also misapprehends the circumstances in which the exclusion operates. In the present circumstances, the insurer does not acquire any alleged right "in respect of a failure by the insured to disclose a matter". The right arises only by reason of the insured's being aware of a fact, occurrence, or circumstance of a particular nature. 11. In this context, it may also be unusual to speak of the insurer's having a "right" to rely upon the scope of a policy to decline a claim. That would be an extensive over-use of the word as used in s 33. The fact that it uses the words, "in respect of", which are very wide, does not alter that conclusion. On no view does a right arise in the insurer under the policy and, even if it were thought that the ability to defend a claim on the basis that it does not come within the policy cover is a "right", the exclusion's invocation is not "in respect of" a failure to disclose a matter to the insurer. 12. On this issue, counsel for the UCPT sought to rely specifically upon a passage from Mr Campbell KC's article (at p 99) which specifically encapsulated its arguments. It read: It is quite possible for an exclusion clause to purport to give an insurer rights, that arise in a situation where a matter was not disclosed, and where the terms of that exclusion clause did not themselves contain any words that state in terms that the right to exclude liability exists because of, or arises from, any failure to disclose. If an exclusion clause operates to deny cover by words referring to a matter that the insured knows before the contract is entered, and in fact that matter has not been disclosed to the insurer, the clause gives the insurer a right in respect of a failure by the insured to disclose a matter. Section 33 makes such a clause inoperative. 1. By this, the UCPT sought to render the words "in respect of a failure by the insured to disclose a matter", effectively redundant. No warrant was shown as to why the Court would rewrite the legislation to widen its operation substantially more favourably to insureds in this way. 2. It also sought to rely upon a subsequent passage in Mr Campbell KC's article (at p 100) which said that: Another policy of the IC Act is that the remedies available to an insurer when there has been a failure to comply with the duty of disclosure are limited to those that arise under s 28. When there has been a failure to comply with the duty of disclosure, a clause the substance of which is that an insurer has no liability at all concerning a type of matter that the insured knows before the contract is entered, could in some circumstances give an insurer wider rights than the rights that arise under s 28. In having that effect it would operate contrary to the policy of the Act. 1. Though the above observations might generally be accepted, it does not answer the point made above that Exclusion 7(c) is not concerned with the duty of disclosure and, in particular, its operation is not conditioned on disclosure, but rather with the existence of a relevant fact, occurrence or circumstance and the insured's knowledge of it prior to the commencement of the policy. 2. In the course of the UCPT's submissions, the Court was taken to the version of Exclusion 7 contained in the 2008/2009 policy, which reads: This policy does not cover any liability for or arising directly or indirectly from: … any Claim, fact, circumstance, or occurrence: a. in respect of which notice has been given to the Company or any other insurer under a previous insurance policy, or b. disclosed or communicated to the Company in the proposal or declaration or otherwise before the commencement of the Period of Insurance, or c. of which the Insured is aware before the commencement of the Period of Insurance, which may give rise to claim. 1. Counsel for the UCPT described subclause (c) as a clause which, effectively, provided the following: If an insured is aware of a matter before the commencement of the period of insurance, which may give rise to a claim, it is obliged to disclose that matter. 1. It is necessary only to refer to the actual terms of the clause to appreciate that the submission necessarily requires a radical contortion of that language. There is no need to consider this submission further. 2. On this issue the learned primary judge found (at [581] – [582]) that the preferable approach is that s 33 is concerned to restrict the remedies for non-disclosure or misrepresentation which impact the validity of the policy itself, rather than terms which merely restrict the policy's scope. That, he held, was supported by the purpose for which Pt IV, Div 3 was included in the ICA. He also held (at [583]) that s 33 ought to be read in the light of its heading, "No other remedies", which forms part of the Act: s 13(2) of the Acts Interpretation Act 1901 (Cth): and is thereby part of the context in which the section is to be construed. Read in this way, it accords exclusivity to remedies provided for in Pt IV, Div 3, rather than impacting an insurer's rights in respect of the scope of a policy. Moreover, as his Honour said, s 40(3) would be redundant were exclusion clauses such as Exclusion 7(c) to be rendered void by s 33. That is because, if s 33 works in the manner contended by the UCPT, a person would always obtain cover under any subsequent policy subject to the insurer's discharging the onus under s 28, so that s 40(3) would be left without any work to do. His Honour's reasoning was adopted and advanced by Allianz on appeal, and, with respect, there is much to commend in it. It is an additional foundation for rejecting the UCPT's submissions as to the effect of s 33. The impact of s 52 of the ICA 1. As mentioned above, the UCPT relied also upon s 52 of the ICA in support of its contention that Exclusion 7(c) is void or unenforceable. The section relevantly provides: 52 "Contracting out" prohibited (1) Where a provision of a contract of insurance (including a provision that is not set out in the contract but is incorporated in the contract by another provision of the contract) purports to exclude, restrict or modify, or would, but for this subsection, have the effect of excluding, restricting or modifying, to the prejudice of a person other than the insurer, the operation of this Act, the provision is void. … 1. Here, the essential question is whether Exclusion 7(c) excludes, restricts or modifies the operation of the Act. 2. The contention was supported by the proposition that the exclusion relevantly excluded the operation of the Act, such as s 28, in relation to remedies in respect of awareness of matters which may give rise to a claim and which have not been disclosed. This approach is argued to have been propounded in Kelly and Ball Principles of Insurance Law at 2708 [2.0320.35] and, particularly, in the following passage: The effect of that section is to render void provisions in contracts which purport to impose a duty of disclosure on the insurer (sic) that is broader than the one imposed by the Act. Unlike s 33, it specifically requires one to look beyond the wording of the contractual provision and to consider its effect. (Footnote omitted). 1. Even if it were accepted that s 52 has a broader operation than s 33 rather than one of a different nature, it does not alter the above analysis. As has been demonstrated, the relevant operation of the Act is as to an amelioration of the consequences of a breach of the duty of disclosure in s 28. That is unaffected by Exclusion 7(c), which deals with the scope of cover regardless of the occurrence or otherwise of non-disclosure, which is irrelevant to the exclusion, though it might be said in a general way that its inclusion is a consequence of the expression and other limiting features of the policy. The views expressed by Kelly and Ball are quite consistent with this, though the subjects differ. 2. As mentioned, Kelly and Ball disagree with the decision in Pech v Tilgals where Dumford J rejected the submission that s 33 rendered invalid a clause which defined the scope of insurance by reference to, inter alia, known facts and circumstances. The authors observe the following (at 14,272 [14.0170]): It is difficult to see how the exclusion clause did not affect the operation of the Act to the prejudice of the insured. A term which only applied when the insured knew the relevant facts and did not disclose them would clearly be caught by s 52. It is not clear why a term does not continue to have the relevant effect in the case of non-disclosure because it also has the same effect where the circumstances are disclosed. 1. With great respect to the opinions of the learned authors, Exclusion 7(c) does not affect the operation of the ICA. The Act has no operation since there is nothing to which it has relevance on which it operates. There was no issue of non-disclosure and the Act does not purport to operate on issues of the limitation of cover of this kind. Despite the Act's intervention into the relationship between insureds and the insurer, the parties are free to contract as they see fit within its legislative parameters. 2. Specific reference was made by the UCPT to a part of Mr Campbell KC's article where he says (at p 101): Thus, s 52 makes void a provision in a contract of insurance that professes or claims to exclude restrict or modify the operation of the IC Act, or the meaning of which is that the operation of the IC Act is excluded restricted or modified, to the prejudice of anyone other than the insurer. (Emphasis in original). And: If there is a provision in an insurance contract the effect of which is that, when there has been a failure to comply with the duty of disclosure, the insurer has any right in respect of any failure by the insured to disclose a matter to the insurer before the contract was entered into, more extensive than that conferred by s 28(3), that provision is void. It is void regardless of whether it takes the form of a limitation on the scope of cover, of an exclusion clause, or whatever other form the ingenuity of the drafter might devise. 1. This general approach is acceptable, but the width of its general statements does not allow for or explain the problems following from generalization based only on the obvious purpose of the section as has been identified. 2. It matters not how many times or in how many different ways the proposition is advanced, the legal reality of clauses such as Exclusion 7(c) is that they are neither concerned with the duty of disclosure nor the failure to disclose facts and, moreover, their operation is not conditioned upon either. 3. That conclusion is consistent with the observations in Ian Enright and Robert Merkin, Sutton on Insurance Law (Lawbook Co, 4th ed, 2015) 644 – 646 [7.1180], where the learned authors prefer the reasoning of McClellan J in Porter v GIO Australia Ltd (2003) 12 ANZ Insurance Cases ¶61-573, and observe that the construction of the type propounded by the UCPT is one that: … appears to be a distortion of the purpose of ICA s 33, which is designed to restrict the remedies available for non-disclosure or misrepresentation potentially affecting the validity of the policy, whereas a clause of the type under consideration is merely one which defines the risks for which the insurer is prepared to offer cover. (Footnote omitted). 1. In substance, the UCPT claimed that, had it, in accordance with s 40(3), given notification to Allianz of the content of the LKA2 report during the 2004/2005 policy period, being when it received it, it would have been covered for all claims arising from the circumstances referred to, but, as notice was not given in that period, it is not covered by that or any policy thereafter. This, it was said, is a consequence of a penalty for non-disclosure that is wider than s 28(3) permits because it does not require the insurer to demonstrate prejudice to avoid the obligation to indemnify. That, however, was not how the UCPT advanced its case, at least in the first instance. Indeed, it was seemingly acknowledged that if the problem in LKA2 was disclosed in the 2004/2005 policy year, the sub-limits of the cover in relation to sexual abuse would have been exhausted relatively quickly. Its precise position in relation to the cover to which it claims to be entitled was far from clear. However, it now seems to be asserted that the claims in the years prior to the 2007/2008 policy should be covered despite its failure to disclose LKA2, and that all claims thereafter should be covered, regardless of the year in which they are made. How that would happen was not detailed in submissions. 2. It might be noted here that, in the course of his submissions, counsel for the UCPT referred to pages 87 to 109 of the article of Mr Campbell KC and adopted the arguments advanced in those pages in certain respects. It is far from clear which of those arguments the UCPT actually relied upon, and it is not legitimate to make submissions to the Court simply by way of incorporating by reference myriad arguments set out in academic articles, even if they be of someone as noted as Mr Campbell KC. For instance, what is the Court to make of Mr Campbell KC's discussion about an Hohfeldian analysis of what constitutes a "right"? Is it to be expected that the Court address that argument and, the further implicit one that the Commonwealth Parliament had that in mind when enacting the ICA in 1984? There is no basis for advancing submissions in this way and no error can arise from a Court declining the invitation to sift through the numerous propositions made in the identified article and then respond to any that might appear to be relevant. Exclusion 7(c) is not void or unenforceable 1. For the above reasons, neither ss 33 nor 52 defeat the operation of Exclusion 7(c). The UCPT's submissions on this point should be rejected, as should be the correlative ground of its notice of contention. Issue 8 – Does s 54 expand the operation of s 40(3)? 1. The next issue is whether s 54 of the ICA applies to the UCPT's failure to comply with the requirement in s 40(3) to notify the insurer during a relevant period of insurance so that it could be excused. Relevantly, s 54 provides: 54 Insurer may not refuse to pay claims in certain circumstances (1) Subject to this section, where the effect of a contract of insurance would, but for this section, be that the insurer may refuse to pay a claim, either in whole or in part, by reason of some act of the insured or of some other person, being an act that occurred after the contract was entered into but not being an act in respect of which subsection (2) applies, the insurer may not refuse to pay the claim by reason only of that act but the insurer's liability in respect of the claim is reduced by the amount that fairly represents the extent to which the insurer's interests were prejudiced as a result of that act. … 1. The import of the UCPT's submissions was that its failure to give notice, pursuant to s 40(3), of LKA2 to Allianz in the year in which it became aware of it, can be excused by s 54. On that basis, the policy cover in force when the omission occurred was thereby extended, so that when a relevant claim was subsequently made it is taken, if it had arisen from the circumstances which were subsequently notified, to have been made during the relevant period. Undeniably, this would effect a substantial alteration to the statutory preconditions expressed in s 40(3) as to when an extension of cover under a policy will occur. 2. On this issue, the UCPT must establish that the decision of the New South Wales Court of Appeal in Gosford City Council v GIO General Ltd (2003) 56 NSWLR 542 (Gosford v GIO), which held that s 54 is unable to cure an insured's failure to notify for the purposes of s 40(3), is plainly wrong: see Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89, 151 – 152 [135]; Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485, 492. That task is made more difficult since the Court of Appeal's decision has been followed on several occasions by differently constituted benches of that same court: see, for example, Clark v Avant Insurance Ltd [2022] NSWCA 175 [39]. 3. The substance of the submission was that the current authorities on this topic have failed to grapple with and give effect to s 54 as a statutory extension of the rights under a policy in accordance with FAI General Insurance Co Ltd v Australian Hospital Care Pty Ltd (2001) 204 CLR 641 (FAI v Australian Hospital Care) and claimed to have been clarified by Maxwell v Highway Hauliers Pty Ltd (2014) 252 CLR 590 (Maxwell v Highway Hauliers). 4. As a result of the analysis of FAI v Australian Hospital Care in subsequent cases, there is no need to set out the High Court's reasoning in great detail. Nevertheless, a brief discussion of the main points raised is warranted. The case concerned a policy of liability insurance in respect of claims made during the policy period. It was a term of the policy that if, during the period of cover, the insured became aware of any occurrence which might subsequently give rise to a claim and gave written notice of it to the insurer, any claim which might subsequently be made against the insured arising out of the occurrence would be deemed to have been made during that period of cover. The insured became aware from a firm of solicitors that its client was considering making a claim against it, but omitted to notify its insurer in the period of cover during which that fact became known. A claim was subsequently made after the period of cover and the insured sought indemnity under the policy. 5. Prior to a detailed consideration of s 54, the plurality (McHugh, Gummow and Hayne JJ), made a number of preliminary observations about its effect. First (at 652 [20]), that, subject to subsection (2), it operated to remove the insurer's right to refuse to pay a claim under the policy where, apart from the section itself, the effect of the policy, according to its terms, would be that the insurer would be able to refuse to pay a claim. Secondly (at 652 [21]), the effect of that is modified where, in such circumstances, the insurer's interests are prejudiced, in which case its liability in respect of the claim is correspondingly reduced. Thirdly (at 652 [22]), reference was made to Antico v Heath Fielding Australia Pty Ltd (1997) 188 CLR 652, 669, where it was held that for the purposes of s 54, the omission which may trigger the operation of the section for the insured may be one "to exercise a right, choice or liberty which the insured enjoys under the contract of insurance", and it is not limited to something which the insured is obliged to do. Finally (at 652 – 653 [23]), it was found inappropriate to attach labels to policies of insurance though they may be useful as shorthand references; and in each case, attention must be given to the policy's actual terms. 6. Despite that latter observation, their Honours accorded the policy before them the shorthand expression of a, "discovery policy", on the basis that the critical fact under the contract which triggered a right of indemnity was the insured's discovery of the making of a claim on it or its discovery (its becoming aware) of an occurrence which might give rise to a claim. 7. The majority recognised that the application of s 54 requires an identification of the effect on the insurer of a policy's operation in respect of a claim that the insured has in fact made (at 659 [40]), which, in turn, necessitates precise identification of the event in respect of which indemnity is claimed (at 659 [41]). For these purposes, it is then necessary to identify any temporal characteristics of the claim in respect of which cover is provided. So, under an occurrence policy, the insured's claim for indemnity is confined to an occurrence happening within the period of insurance. Indemnity under a "claims made" policy requires that the claim on the insured be made in that period. Section 54 does not alter the nature of the claim for which the policy provides indemnity, so that an insurer's refusal to pay a claim not within the policy's scope is not a claim which the insurer fails to pay due to some act or omission of the insured or some other person (at 660 [44]). The Court held that, in the context of the policy there under consideration, the cover was provided in respect of, inter alia, a claim which arose from a fact of which the insured became aware during the policy period, and any subsequent claim meeting that description is covered. However, s 54 would not assist the insured where the fact from which the claim arises is discovered after the policy period. As, in the matter before the Court, the insured became aware of the relevant fact during the policy period, the claim was within the policy's cover, and the insured's failure to notify the insurer of it was a matter on which s 54 could operate to prevent the insurer from refusing to pay. 8. In Gosford v GIO, the insured (being Gosford City Council) became aware in 1991 of a fact which might give rise to a claim, but gave no written notice of it to its insurer in that policy year. In 1994, a claim arising from that fact was made against the Council which then notified the insurer. The insurer declined indemnity on the basis that the claim had not been made against the Council during the policy year. The Council asserted that, by the concurrent application of ss 40(3) and 54 of the ICA, its failure to notify during the relevant policy year of the facts which might give rise to a claim was excused, though no claim was made against it during that policy period. That was rejected by the Court of Appeal. Sheller JA (with whom Spigelman CJ and Meagher JA agreed) observed that the policy in question was a "claims made" policy, though its operation was altered by s 40(3) in that cover was extended in relation to claims which arose from facts which were notified to the insurer within the policy period. His Honour (at 548 [19]) then referred to the insured's submission that s 40(3) transformed the policy into a "discovery policy" and that s 54 had the consequence that the insurer could not "refuse to pay the claim by reason of the act of the insured in failing to give the notice in writing to the insurer of facts which might give rise to a claim against the insured before the insurance cover expired". 9. After reviewing a series of cases which had rejected the proposition that s 54 operates upon the effect of the statutory provisions as distinct from the contractual provisions, Sheller JA referred to FAI v Australian Hospital Care at 659 – 600 [40] – [46] and concluded (at 553 [35]) that crucial to the High Court's finding was that s 54 was premised upon the actual claim made on the insurer and whether it fell within the scope of the cover provided, such as a claim against the insurer for indemnity in respect of a claim made against the insured during the policy period. Although the section extended the insured's rights to indemnity in respect of such a claim by denying the insurer's right to rely upon some act of the insured or other person, it did not transmogrify a claim against the insured which was not within the cover into one which was. As his Honour held (at 533 [36]): … The section [s 54] does not operate to relieve the insured of restrictions or limitations, such as the temporal limits within which the claim must be made upon the insured in a claims made policy, that are inherent in that claim. 1. His Honour then found that the fact that the demand was made on the insured outside the policy period was decisive, unless s 40(3) effected an extension. In this latter respect, he said (at 554 [37]): To invoke s 40(3) the insured must have given notice in writing to the insurer of facts that might give rise to a claim against the insured as soon as was reasonably practicable after the insured became aware of those facts but before the insurance cover provided by the contract expired. This was not done. In my opinion, that is the end of the matter. The occasion for s 40(3) to operate did not happen. Accordingly, the subsection does not apply to prevent the insurer contending that the claim is not within the policy. 1. The UCPT argued that the broad principle in FAI v Australian Hospital Care can and should apply to a policy of insurance, the operation of which is extended by s 40(3) to cover claims which arise from facts which might give rise to a claim and which are notified to the insurer within the policy period, and s 54 then cures the omission where notice is not given within the policy period. It was argued that s 54 applies because the insurer is unable to refuse to pay merely because of the insured's omission. 2. That submission should be rejected. As it was indicated by the High Court in FAI v Australian Hospital Care, s 54 does not extend the policy's cover as the UCPT would have it. First, consideration must be given to the relationship between the claim which the insured makes and the liability for which the policy provides cover. The policies in issue in this case cover claims made against the insured during the policy. The relevant temporal limit is necessarily an inherent restriction on the scope of the policy cover and, in accordance with the determination in FAI v Australian Hospital Care, is not affected by s 54. 3. The UCPT, advanced a further submission, that the touchstone of the extension provided by s 40(3) was not notification of facts to the insurer within the policy period, but the awareness of them so that, so long as the insured becomes aware of them during that time, the omission to notify the insurer is excused by s 54. That submission understates the importance which s 40(3) places on the nature of the claims which are deemed to be within the extended operation of a policy. The opening words of s 40(3) are, "[w]here the insured gave notice in writing to the insurer of facts that might give rise to a claim against the insured", and it is fundamental that the claim, to which the policy is extended by the statute, is one which arises from the facts notified. It might also be noted that the section then requires that the facts are notified to the insurer, "as soon as reasonably practicable after the insured became aware of those facts but before the insurance cover provided by the contract expired". Those temporal elements are inherent in the extension provided by the statute. The insured's awareness is necessarily antecedent to the other temporal element but is not, of itself, a restriction inherent in the claim. The essential element is that the claim arose from a fact which was notified to the insurer within the policy period, and that is significantly different from the extension provided for in the policy considered in FAI v Australian Hospital Care. 4. The UCPT placed substantial reliance on what it described as the clarification of what was said in FAI v Australian Hospital Care by the High Court in Maxwell v Highway Hauliers. In that case the insured, which operated a freight transport business, had a policy of insurance that contained a condition that indemnity was not provided in relation to vehicles unless it was being operated by a driver with a prescribed driver profile score in a psychological test approved by the insurers. The claim made was in relation to loss arising from crashes involving two of the insured's vehicles in respect of which neither driver had the required qualification. The insurer accepted that the failures to take the test did not contribute to the accidents and that their interests had not been prejudiced by it. The High Court upheld the claim for indemnity which depended upon the operation of s 54, because the operation of each vehicle by its unqualified driver was properly characterised as having occurred by reason of an "act" that had occurred after entry into the contract of insurance. It had been argued that the relevant feature, the absence of qualification, was not an "act" within the meaning of the section. 5. In allowing the appeal, the Court (Hayne, Crennan, Kiefel, Bell and Gageler JJ) dealt with the insurer's submission that the requirement that the drivers' qualification was part of an inherent characteristic of any right to indemnity. The Court held (at 598 [23]) that the expression used in FAI v Australian Hospital Care, "restriction or limitation that is inherent in the claim", was sought to be misapplied in the case before it and that not all restrictions or limitations on the scope of cover can be so characterised. A restriction or limitation of that nature is one which must "necessarily be acknowledged in the making of a claim, having regard to the type of insurance contract under which the claim is made". In FAI v Australian Hospital Care, it had been acknowledged in relation to a "claims made and notified" policy that the indemnity could relate only to a demand made on the insured during the period of cover. The Court in Maxwell v Highway Hauliers went on to observe (at 598 [24]): Similarly, the making of a claim under a "discovery" contract, of the type in issue in FAI itself, necessarily acknowledges that the indemnity sought can only be in relation to an occurrence of which the insured became aware during the period of cover. 1. In relation to an "occurrence based" policy, such as that there under consideration, the Court decided (at 599 [25]) that the claim necessarily acknowledged that the indemnity could be in relation to only an event which occurred during the period of cover. That inherent restriction in the cover, was irrelevant in the matter before the Court, where the occurrences had occurred during that period. The reason adopted for the declinature was that the vehicles were being driven by unqualified drivers. Their actions in driving were characterised (at 599 [26]) as being "acts" that occurred after the contract was entered into and, as the omissions of the drivers to obtain the required qualification occurred during currency of the policy were not restrictions or limitations inherent in the basic nature of the policy's cover, s 54 was enlivened. 2. The Court also referred to the decision of the Queensland Court of Appeal in Johnson v Triple C Furniture & Electrical Pty Ltd [2012] 2 Qd R 337, where the policy had provided cover in respect of accidental injuries to passengers whilst on board an aircraft. It was subject to an exclusion with the temporal element that the cover did not apply whilst the aircraft was being operated in breach of air safety regulations. The High Court was of the view that this was not an inherent feature on the nature of the cover, and so it was within the purview of s 54. The corollary of that view was that the conclusion of the Queensland Court of Appeal to the contrary was incorrect. 3. It was further submitted for the UCPT, that, in the light of its submissions on Maxwell v Highway Hauliers, the decision in Gosford v GIO was similarly in error in that it misapplied the concept of a "restriction or limitation that is inherent in the claim", as that expression was used in FAI v Australian Hospital Care. Again, that submission should not be accepted. It appears sufficiently clearly from Sheller JA's reasons that his Honour accepted that s 40(3) created further temporal limitations in relation to those claims which might be indemnified under the policy. Those relevant limitations were that claims made against the insured had to have arisen from facts of which written notice was given to the insurer as soon as was reasonably practicable after the insured became aware of them, but before the insurance cover provided by the contract expired. His Honour reasoned (at 554 [37]) that, as that was not done, there was no claim of the kind in respect of which indemnity might be granted. In terms of whether a matter is a restriction or limitation inherent in the claim for this purpose, there is no discernible or practical difference between a claim's being made during the policy period and its being one which arose from a fact notified during the policy period. 4. The UCPT also relied on Avant Insurance Ltd v Burnie [2021] NSWCA 272 (Avant v Burnie), where the New South Wales Court of Appeal addressed the issue of whether s 54 could apply to s 40(3), in respect of an omission during the policy period to give the required notice. The policy was a "claims made and notified" policy and no notice had been given of the possibility of a claim during the period of cover, though the insured had by then become aware of a fact that might give rise to one. It was submitted that the trigger of s 40(3), to give notice of a fact that might give rise to a claim was, in effect, a contractual provision on which s 54 could operate. That was rejected by McCallum JA and Simpson AJA (at [29] – [30]) whom, in their joint judgment, held that there was no such contractual provision. It is a requirement of s 54 that the policy should have a particular effect, and that did not exist where it was only the statutory provisions that had such an effect. 5. In his separate reasons, Emmett AJA held (at [40]) that the policy was not a "discovery policy", as that expression was used in FAI v Australian Hospital Products, but rather a "claims made and notified" one, and that was decisive on the question of the operation of s 54. As his Honour observed (at [78]): The question of whether the Policies can fairly be characterised as "Discovery" policies in the sense indicated is significant because s 54 cannot operate to resolve a failure to satisfy s 40(3). If the Policies are to be characterised as "Discovery" policies only by the operation of s 40(3) rather than by reason of the actual contractual terms of the Policies, s 54 can have no relevant operation. 1. Later, his Honour said (at [89]): The correct analysis of the Notification Provision indicates that the liability of Avant Insurance in respect of notification of facts and circumstances would not arise out of a term of the Policy, but from the operation of s 40(3) alone. For reasons indicated below, the "Discovery" effect of a "Claims Made and Notified" policy that arises solely by the operation of s 40(3) is not open to remedy by s 54. The purpose of the Continuous Cover Clause becomes clear in that context. 1. These passages reflect the orthodoxy that s 40(3) does not impose a term into the contract of insurance, but merely superimposes a statutory entitlement which extends the insured's rights against the insurer. 2. Emmett AJA also carefully analysed the ALRC Report from which the ICA emerged, and noted that the rationale for s 54 was to ameliorate the consequences of an insured's breach of a promissory warranty and not to abrogate the consequences of an act or omission by the insured that is detrimental to the insured (at [96]). He opined that the section was not aimed at altering the essential character of cover under a "claims made and notified" policy by permitting an insured to retain cover despite failing to notify of a claim or circumstances within the policy period. Were it otherwise, the entire basis of the cover provided by the insurer would be altered. His Honour's approach is emphasised at [103] of his reasons where he said: Section 54 does not permit the reformulation of a claim, such that it could work with s 40(3) to allow a failure to notify facts and circumstances to be overcome where such a "discovery" clause was not a term of a policy that is properly characterised as a "claims made" policy. Section 54 operates to prevent an insurer from relying on certain acts or omissions to refuse to pay a particular claim. The section does not operate to relieve the insured of restrictions or limitations, such as the temporal limits within which a claim must be made on the insured in a "claims made" policy, that are inherent in that claim. Section 54 cannot be combined with s 40(3) to modify a "claims made" policy to cover a claim arising out of facts and circumstances that were not notified during the period of insurance of the policy. The two sections have different functions. (Footnotes omitted). 1. Reference was also made to the New South Wales Court of Appeal's decisions in Guild Insurance Ltd v Hepburn [2014] NSWCA 400 and Clark v Avant [2022] NSWCA 175 [39], where, in each, the Court adopted the analysis in Gosford v GIO at 553 – 554 [36] – [37], albeit without further comment. 2. Allianz sought support for its position from the first instance decision of Moshinsky J in Darshn v Avant Insurance Ltd (2021) 154 ACSR 1, 54 – 55 [195] – [198], where the insured had made the submission that a combination of ss 40(3) and 54 could expand the operation of a "claims made policy". His Honour rejected this, noting that, as a matter of construction, s 54 is concerned with the "effect of a contract of insurance" and not the effect of a contract of insurance together with s 40(3) or the provisions of the ICA more generally. He stressed (at 54 [192]) that there was nothing in the detailed extrinsic materials, including the ALRC Report, to suggest that ss 40(3) and 54 were intended to have a combined application. Each stood alone as an ameliorative provision. This was stated to be consistent with the conclusion in Gosford v GIO. 3. The foregoing authorities, and especially that of Avant v Burnie reveal the difficulties of the UCPT's submission regarding s 54, which fails for either of two reasons. The first is that, even if it were assumed that it applied to a policy affected by s 40(3), the inherent restriction or limitation in the claims covered is that they be made against the insured in the policy period or arise out of a fact of which the insured notified to the insurer in the policy period: Gosford v GIO at 553 [36]. The second is that s 54 applies only where the policy operates in a way that the insured may refuse to pay the claim. It has no application where the non-compliance with a statutory provision rather than the policy renders the insured's claim unmaintainable. Section operates upon the effect of a contract of insurance 1. That s 40(3) was intended to assist insureds by effecting a change in the operation of policies of insurance does not, as the UCPT submitted, justify a conclusion that the fulcrum of the operation of s 54, that is, the "effect of the contract of insurance", should be displaced. Were that to have been intended by the legislature it might easily have been expressly stated. Though that type of interpretive analysis lacks force on some occasions, in relation to the ICA it has substantial weight. The history of its enactment, especially its origins in the ALRC Report, emphasises the precision with which the terms of the ICA were drafted. Had it been intended that s 40(3) and s 54 were to have a cumulative effect on a policy of insurance, it is unlikely that it would not have been mentioned and discussed, particularly given that the operation which the UCPT would give to the ICA would have the effect that a claims made and notified policy would not only be converted into a "discovery policy", but would be further extended to include liabilities arising from facts of which the insured became aware during the course of the policy, but of which it did not inform the insurer. In that context, an insurer could, at some indefinite future time, become liable to indemnify in respect of a substantial liability, the possibility of which it was not aware, although the insured was, and in respect of which it had not made provision. Though s 54 includes the concept that the insurer's liability is reduced "to the extent to which the insurer's interests were prejudiced", the insurer would carry the onus of establishing that and the peril of not being able to discharge it: Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389. With respect, it is beyond reasonable dispute that, if the ALRC Report and the legislature had intended to impose such a dramatic change on the potential liability of insurers, it would have been mentioned, rather than something left to be divined by inference. 2. The importance of the words in s 54, "the effect of a contract of insurance" was discussed in CA & MEC McInally Nominees Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2009] 2 Qd R 1, where Chesterman J held (at 9 [34]) that, if the submission now advanced by the UCPT were accepted, it would substantially extend the operation of the decision in FAI v Australian Hospital Care. The insured had not given notice of occurrences which might give rise to a claim during the policy period and, indeed, had not even become aware of the position. However, unlike, in FAI v Australian Hospital Care, no clause of the policy enabled the insured to extend the policy's cover by giving such notice. Whilst s 40(3) would have entitled the insured to cover if it had given notice of the occurrence, that entitlement would have flowed from the intervention of the statute rather than through the effect of the policy. 3. For that reason, his Honour observed (at 11 [43]) that the expression "but for this section" in s 54(1) could not be overlooked. The effect of the contract, if one ignores the omission of the insured to give notice of the occurrence, would not have been that the insured was entitled to indemnity. His Honour reasoned that whilst an insurer is not entitled to refuse to pay a claim by reason only of the fact that its insured omitted to give notice of an occurrence, in the matter then at hand, had the insured given notice, the insurer would still not have been obliged to indemnify. In order to reach that position, s 54(1) would have needed to be understood as though it provided, "… where the effect of a contract of insurance would, but for this section, and s 40(3) …" (emphasis in original). 4. His Honour also recognised (at 11 [44]) that s 40(3) does not imply a term into policies of insurance which has the effect of turning them into "discovery polices". That could be contrasted with other pieces of legislation which use the drafting technique of implying terms and, when that occurs, the rights which arise are treated as contractual rather than statutory. He noted that the distinction between contractual and statutory rights has been firmly recognised and maintained: … In Newcastle City Council Brennan CJ referred to "the statutory alteration in an insured's rights … worked by sub-s (3)" and the imposition by the subsection of "a liability where no contractual liability exists", and a "statutory modification of contractual relations" (91, 93). To speak of the statutory alteration of the insured's contractual rights, or the imposition of a statutory liability "where no contractual liability exists" is inconsistent with s 40(3) implying a term into contracts of insurance. 1. The form of impact of s 40(3) on the terms of a contract is clear. It does not replace them, alter them, substitute other terms, or imply terms. It overrides the party's agreement and imposes an additional statutory right which modifies the contract's effect. No amount of judicial exegesis can alter the limitation in the meaning of the words, "where the effect of a contract of insurance", so as to equate to the expression, "where the effect of a contract of insurance as modified by s 40(3) or some other statutory provision". 2. His Honour held (at 11 – 12 [45]) that, as a matter of statutory construction, s 40(3) did not create a statutory right to which s 54 might apply. Although that conclusion was not consistent with that of Rolfe J in Einfeld v HIH Casualty and General Insurance Limited (1999) 10 ANZ Insurance Cases ¶61-450, 75,170, that case pre-dated FAI v Australian Hospital Care and it did not address the statutory interpretation issue referred to above. 3. The views of Chesterman J were subsequently approved by the New South Wales Court of Appeal in Gosford v GIO at 549 – 550 [26] – [28]. 4. The UCPT was then faced with the heavy weight of this confluence of very persuasive authorities, the effect of which it needed to avoid. It submitted that, despite the foregoing, s 40(3) should be seen as laying a foundation on which s 54 might operate. However, its arguments in support of that are neither textual nor contextual, but rather policy-based. As explained to this Court, by reference to the opinions expressed in Kelly and Ball Principles of Insurance Law, it was said that s 40(3) was intended to address the position where insurers did not include such an extension in claims made policies and the section could have been drafted to imply a term to that effect. If, therefore, s 54 cannot apply because s 40(3) does not imply a term, it should be read as if it did. It was stressed that it is the substance that counts, rather than the form. 5. That would amount to an invitation to engage in judicial legislating, and should be rejected. It would involve a substantial leap of faith in circumstances where its terms were carefully formulated in the course of the ALRC's extensive report and consideration. Indeed, acceptance of the invitation might result in serious and impractical commercial consequences, as has been previously explained. The ultimate impact on the insurance industry of extending the operation of s 54 in such a manner is far from clear. It is customary in relation to law reform inquiries of such magnitude, to invite those who have a financial or economic interest in the outcome to make submissions and be consulted, and the ALRC Report reveals that this occurred in its preparation, and the consultation was wide. It is more than likely that had this expansive operation of the Act been suggested, insurers might have provided useful responses about the consequences of widening the gap between the Australian retail market and the operation of the international reinsurance market. They would also have been in the position to identify any unintended consequences of such a significant change. 6. There is no interpretative justification for construing the words of s 54 in a way that fits a preconceived, but unstated, policy objective. Rather, the construction of s 54 insofar as it may relate to s 40(3) was carefully articulated in Gosford v GIO and there is no reason to doubt the accuracy of that decision. That being so, it is inappropriate for this Court to depart from it. 7. This aspect of the UCPT's contentions must also fail. Issue 9 – Estoppel and associated pleas 1. By its notice of contention, the UCPT asserted that, even if Allianz is correct in relation to the above matters, it is nevertheless bound to continue to indemnify it by reason of an estoppel, waiver, election or breach of the duty of utmost good faith. The substance of these claims was that, as Allianz had accepted liability to indemnify the UCPT for a number of the claims of former students, it could not now deny indemnity in relation to other claims including future claims on the basis that it had no obligation to do so. Specifically, it was submitted that it was prevented from relying on the UCPT's knowledge of LKA2 for the purposes of s 40(3) or the operation of Exclusion 7(c). The substance of this was not that for some time it had been aware that the UCPT had known of LKA2, but rather that it itself was aware of it, and by its inaction had allegedly represented that it regarded it as being irrelevant to the issues between them. 2. The consideration of these issues was hampered by the scattergun manner in which the UCPT's submissions were advanced. Incidental reference was made to a wide range of material which vaguely related to the topics of whether there was any representations or detriment, waiver, election or estoppel, without any useful attempt to provide some definition to the points advanced. That was exacerbated by general references to large sections of its written submissions from the trial, where it was said that these points were discussed. It is unclear what was to be done with those prior submissions given that the nature of the estoppel case advanced below was different from that advanced to this Court. Presumably, the Court was expected to sift through them and attempt to ascertain for itself which parts had something more than a passing relevance to the issues on appeal. The incorporation by reference of large parts of other written submissions in this way is inappropriate and should be discouraged, even for the benefit of the party's own case. 3. The difference between the issues of estoppel, waiver, election and breach of the duty of utmost good faith as they were before the primary judge and as they were raised on appeal, arose largely because Allianz now relies only upon the operation of Exclusion 7(c) and UCPT's awareness of LKA2 as supporting its entitlement to decline cover. It is relevant that the primary judge was not required to deal substantively with this topic in his reasons for judgment as he had held that the UCPT had not relevantly become aware of LKA2 until 2009. Nevertheless, he did observe that it would not be entitled to rely upon any estoppel or waiver until it established detriment because, until then, no conclusion of irrevocability could be made (at [689]). In relation to utmost good faith, he found it difficult to accept that Allianz's behaviour transgressed commercial standards of decency and fairness (at [690]). Finally, in relation to election, he found that Allianz was not confronted with any choice which required it to decide between inconsistent and alternative sets of rights or legal positions (at [689]). 4. The UCPT's estoppel claim was further impeded by a noticeable want of precision in its submissions. It adopted a very broad-brush approach to the articulation of the alleged representation or assumed state of affairs on which the relief claimed essentially depended, and a similar approach was taken to identifying the detriment allegedly suffered. No attempt was made to provide temporal specificity to these elements and, to some extent, the submissions seemingly involved the occurrence of alleged detriment prior to the making of some of the representations. 5. Though an appellate court is to undertake a "real review" of the case under appeal: Fox v Percy (2003) 214 CLR 118: that review should be assisted by submissions that reasonably attempt to crystallise the argument and its points. 6. Before continuing, it is desirable to observe that claims of estoppel, waiver, election and breach of duty are now almost ubiquitously advanced in insurance cases, often as here, without any appropriate attention to establishing their elemental foundations. Particularly, in relation to estoppel, the court's denial of a party's entitlement to rely upon an undisputed right or entitlement should not occur via some tacit divination by judges of what might be fair in a particular case. At least, to date, it has not occurred in that manner. Certainly, where its elements are appropriately established, an adjustment of the parties' rights and obligations can be warranted. That, however, is substantially different from the circumstances in this case where the relief was sought despite the absence of any evidence of detrimental reliance. Here, the UCPT relied on mere assertion and a curial talismanic and implicit conclusion that it is "unfair" that Allianz should now be entitled to rely upon rights which, had it previously appreciated that it had them, it would most likely have exercised. That is not the stuff of estoppel. Some relevant facts 1. The statement of agreed facts relevantly indicated that over a number of years and pursuant to a number of sequential policies, Allianz indemnified the UCPT in relation to a series of claims made against Knox, and more specifically, in relation to the claims of TPC1 to TPC11. On or about 15 December 2006, it first accepted a claim for indemnity in relation to such sexual abuse allegations, that is the claim by TPC1. The latest claim indemnified was made by a letter of demand on 13 October 2011, and it was settled by agreement dated 15 January 2014. 2. Between 2006 and 2014, substantial amounts were paid by Allianz in relation to UCPT's defence costs and its costs of settling claims. The nature of the UCPT's claims 1. The foundation of the UCPT's estoppel or waiver claims, as appears from paragraph 88 of its written submissions, is that Allianz should be prevented from contending that: 2. the notifications of facts upon which the UCPT relied were ineffective for the purposes of s 40(3), because they were not given as soon as was reasonably practicable after it became aware of the facts contained in LKA2; and 3. in respect of policies incepted after the UCPT's receipt of LKA2, Exclusion 7 was engaged by reason of its prior knowledge of the facts contained in that report and that it was therefore entitled to deny indemnity to the UCPT. 4. The precise conduct of Allianz on which the UCPT relied for estoppel or waiver was unclear. As best as can be ascertained, it included the following propositions such as are derived from its written submissions: 5. That Allianz was aware from an early stage that Knox had engaged Mr Wilson to investigate the allegations by TPC1 against Mr Nisbett, and at no time did it express interest in the investigation or the report. 6. By the time that the allegations against Mr Nisbett had progressed to a claim against the school in 2007, Allianz had been informed of the further investigation and report into wider allegations of historical sex abuse by Mr Nisbett, and it expressed no interest in the investigation or report. 7. By that conduct, it represented to the UCPT that it had no interest whatsoever in the investigation which Mr Wilson had carried out. 8. By 10 April 2007, Allianz became aware of the content of LKA2 through the advice of Ms Blacker, of Gadens who was acting for it in TPC1's claim in relation to Mr Nisbett in respect of which indemnity was granted. 9. Despite its knowledge, it continued to indemnify the UCPT, continued to renew its insurance, continued to instruct solicitors in the conduct of its defence of third-party claims, and continued to make payments to resolve them. 10. By those acts, it represented to the UCPT, and both parties formed the mutual assumption, that Allianz would not contend either of the matters set out above; namely that there had been no adequate notice under s 40(3) or that Exclusion 7(c) was engaged. 11. The UCPT claimed that the estoppel operated from 2007, when the claim of TPC1 developed into an action against the school. 12. It submitted that it suffered prejudice or acted to its detriment in its reliance on Allianz's alleged representations, but did so ambiguously by variously alleging that: 13. it suffered a loss of the chance to provide LKA1 and LKA2 and/or other reports to the Ombudsman or more detailed information about them to Allianz; 14. it suffered loss by allowing Allianz to conduct the defence of the claims, instruct solicitors and receive information from them; 15. it lost the chance of moving its insurance account to new insurers who may have been prepared to provide cover in relation to the historic sexual abuse as a price for obtaining the wider UCA business; and 16. it suffered the loss of a chance of continuing to insure with Allianz through continuous cover clauses. 17. Its obscurity in respect of the alleged detriment rendered this part of its claim especially nebulous. There was an absence of any temporal identification as to when the detriment was suffered. Even in subparagraph (a), the alleged acts of detriment seem to predate any relevant conduct by Allianz. Whether there was any representation or convention assumed by the parties 1. The basis of the allegation of Allianz's alleged representation was argued to be its response to being informed of investigations commissioned by Knox into possible sexual abuse of pupils at the school. During the hearing of the appeal, it was advanced in the following terms: Allianz, when told on numerous occasions about the existence of the LKA2 materials and/or the investigations by TPC13 and/or the reports of those matters to the ombudsman, failed to ask the UCPT for any further information or documentation relating to the facts notified, including, relevantly, any information or documentation relating to the investigation by TPC13 or the report that was [submitted to] the Ombudsman. 1. It is not clear why reference was made to TPC13 in this part of the transcript. It can be assumed that the reference was intended to be to Mr Wilson of LKA Risk Services Pty Ltd or, perhaps, the teacher from Knox identified as PTPC41. 2. A party seeking to rely upon an estoppel by representation should identify, with appropriate specificity, the precise nature of the representation and, if it is said to have arisen by conduct, the conduct which is said to have occurred. That is especially true in relation to the suggestion that Allianz represented that it had no interest in the investigation or report by Mr Wilson. As best as might be ascertained, it appears that the essence of the UCPT's submission is that, by Allianz's alleged indifference to LKA2, Mr Wilson's investigations, or the report sent to the Ombudsman, it represented that it would not rely upon the omission to disclose to it for the purposes of s 40(3) or Exclusion 7(c). Necessarily, there are more than a few unstated contentions and propositions in that reasoning. The Blacker advice 1. In part, the alleged representation is said to have arisen from the manner in which Allianz responded to its knowledge of the Blacker advice sent under cover of a letter of 12 June 2007. Whilst that has been discussed previously, here, the issue is the nature and degree of knowledge which Allianz had as a result of Ms Blacker's becoming aware of the content of LKA1 and LKA2. Reference was especially made to a version of the Blacker advice which included handwritten notations on it. It is unclear when those notations were made, or by whom, and any conclusion would be seriously speculative. In respect of some, there is fair argument that they were made relatively soon after the advice was provided to Allianz. An example is that at the end of the document where the heading, "Instructions Required", appears, a notation was made to the effect that the required instructions were given verbally. The origin and date of other notations are more vague. 2. Some of those others included, "Knox Church on notice of prior conduct", and, "Pattern with another student, another pupil. Enough for notice. Should have been disclosed". In relation to those, the UCPT submitted that it should be inferred that they were made at around the time when Allianz received the advice by someone at Allianz in a sufficiently responsible position to bid it with the knowledge, with the consequence that it was then aware of its rights in relation to the UCPT's prior knowledge of Mr Nisbett's conduct. There is some difficulty in those conclusions. First, they require an assumption that all the notations were made at the same time by the same person, though there is nothing which suggests that that was the case. They may have been made at different times, with some made much later, such as around 2012, when a review was undertaken of the material in relation to the UCPT's knowledge of relevant facts. It is not self-evident that each individual piece of handwriting on the letter is under the same hand. 3. In this context it is relevant that the primary judge held (at [333] and [342]) that Ms Blacker was Allianz's agent for the purposes of receiving notification of facts which might give rise to a claim and that her knowledge of facts which she obtained in the performance of her work for it was imputed to it. Those findings were not challenged on appeal. On that basis it is, possibly, unnecessary to determine when or how the notations were made. On the other hand, they are somewhat irrelevant to whether Allianz made any representation for the purposes of an estoppel, as it was not suggested that the UCPT was aware of the making of the notations, by whom they were made, or when. Nor was it given in evidence that anyone at the UCPT was aware of the correspondence between Ms Blacker and Allianz. It seems its only relevance was that it went to Allianz's awareness of some matters. 4. His Honour also found (at [414] – [415]) that Ms Blacker read and considered LKA1 and LKA2, including its appendices, on 10 April 2007. That finding was also not challenged on appeal. 5. For present purposes, then, it might be accepted that as a matter of law and for some purposes, knowledge of the existence of LKA2 and its associated materials was acquired by Allianz at or about the time of Ms Blacker's reading it, or when the letter of advice was given to Allianz. That, however, is not conclusive of the issues under consideration. The evidence relied upon to establish the provision of information to Allianz of the existence of reports and investigations 1. In the course of the appeal, the Court was informed that the UCPT would provide details of the evidence on which it relied as to when Allianz was informed about Mr Wilson's investigations or features of it, or of its report to the Ombudsman. A document was subsequently provided to the Court, though what it purported to demonstrate was unclear. It was headed "UCPT – Estoppel / utmost good faith references". It contained a series of references to evidence and, from the heading, it is apparent that they possibly related to the estoppel argument and/or the utmost good faith argument, though how they did so was not apparent. This compounded the difficulty surrounding the submissions on this point. Nevertheless, it is necessary to deal with the evidence so identified. Emails of December 2003 and January 2004 1. The first document referred to in the list was a memorandum dated 18 December 2003 from Marsh to Allianz concerning the potential claim by the mother of TPC1. The second was a memorandum from Marsh to Allianz dated 16 January 2004, again concerning the claim made by the mother of TPC1. It appeared to be a "follow up" from the prior letter. It contained information about the general circumstances of the alleged inappropriate conduct towards TPC1 by Mr Nisbett. The emails attached to the memorandum disclosed that an investigation had been conducted by an independent investigator who had concluded that no disciplinary action was recommended, but that a general caution be issued in relation to appropriate conduct with students. 2. The UCPT cannot rely upon these memoranda and associated emails as amounting to a representation that Allianz accepted that any of its policies would respond to that or future similar claims. No claim had been made, and none was anticipated. On the contrary, the matter had been investigated and the conclusion reached was that no disciplinary action was required, but merely a caution be given about appropriate contact with students. Rather than alert Allianz of the possibility of a claim, the memorandum and emails taken together indicated that it was unlikely. It seemed to be suggested that, in order to avoid an implied representation, Allianz should have sought further information though, why that should be so, was not explained. Importantly, no person on behalf of the UCPT gave evidence that any person in the organisation regarded an absence of a response from Allianz as somehow amounting to a representation. That is not surprising. 3. For present purposes it is difficult to see how the memorandums assist the UCPT's submission. The 2006 / 2007 notifications 1. The next notification relied upon by the UCPT was in the form of an email exchange between Ms Vivian Kontos of Allianz and Ms Maureen Stanistreet of Marsh dated 2 February 2007. By that time, TPC1's complaint had altered and included allegations of sexual abuse by Mr Nisbett, and the email chain reflected both that and the existence of a further allegation of sexual abuse by another student of Mr Nisbett. Ms Stanistreet sent a copy of certain emails to Ms Kontos of Allianz detailing these new matters and informing her that the Ombudsman had been advised of the allegations. Though the primary judge discussed this email correspondence in a number of places in his reasons (as appears from the numerous references in the document provided by the UCPT to the Court), there appears to be no specific reference in them to its relevance in relation to the issue of Allianz's response giving rise to a representation. Ms Blacker's inspection of LKA2 and the letter of advice from Blacker 1. As mentioned, it was found by the learned trial judge (at [415]) that, on 10 April 2007, Ms Blacker examined LKA2 and its associated material, and there is no appeal from this finding, nor from a finding that she was Allianz's agent for receiving notification of the facts contained in LKA2. 2. On 9 June 2007, she sent a letter of advice to Allianz in relation to TPC1's claim and specifically concerning the school's likely liability to him in the litigation which he had threatened. The letter detailed the circumstances of the claim and made a number of other observations, including noting that Mr Nisbett had been "under a cloud" in relation to prior conduct, and that he had been subject to an investigation in relation to it, following which he was removed from his role as a house master. It further referred to the investigation conducted by the school's disciplinary staff member, PTPC39, and relayed the substance of a statement made by Mr Nisbett and materials surrounding his investigation. That statement was the transcript of his interview with Mr Wilson, a copy of which is part of the materials associated with LKA2, though that is not specified in her letter. 3. A slightly amended version of that letter of advice was sent to Allianz on 15 June 2007. It also indicated that if TPC1 had commenced an action against the school for negligence, it was likely that it would be found liable to him. For the present discussion, an important addition appears in paragraphs 3.54 to 3.59, which refer, in a cursory way, to matters raised by LKA2. That was substantially more than appeared in the first letter where, at paragraph 3.52, it mentioned only the existence of a second investigation by Mr Wilson. 4. It can be accepted that Allianz may have become actually aware of the existence of LKA2 from these letters, albeit in a very general way. However, on the issue of whether they might be relevant to the making of a representation by Allianz to the UCPT, there is nothing to suggest that the UCPT or anyone from it or the UCA was aware of the letters, their content, or that they had been received by Allianz. Their relevance to Allianz's knowledge does not accord it relevance to representations, though that seems to have been the way the case was argued. Other materials relied on by the UCPT 1. On or about 27 November 2007, Allianz received a further letter from Ms Blacker in relation to TPC1's claim. It provided an update in relation to his claim and medical reports obtained. It was observed that Mr Nisbett had been harassing TPC1 for about three years prior to the alleged sexual assault. 2. On 10 June 2009, the UCPT gave, in the form of a solicitor's letter, notification to Allianz of the making of a claim against Knox by TPC3. Allianz responded that it regarded the claim as having been notified by the first bulk notification on 31 March 2009, where TPC3 was identified as a person who might be a potential claimant. 3. Similarly, on 24 November 2009, Mr Adra of Allianz accepted that a claim then recently made against Knox by TPC6 had been notified by that first bulk notification on 31 March 2009. 4. In the same way, on 4 December 2009, notification was given of claims by TPC4 and TPC5 in relation to sexual abuse by Mr Treloar and Mr Stewart. Again, Allianz accepted that they had been notified on 31 March 2009. (It is noted that an error exists in Allianz's documents relating to the precise date of the first bulk notification). 5. The UCPT further relied on a spreadsheet prepared by Allianz relating to all claims which had been made to that date and which included a claim against Knox for sexual misconduct. The precise way in which this was relevant to the making of the alleged representation is unclear. 6. On 12 April 2010, Mr Adra of Allianz replied to what became known as "the third bulk notification", which had been made on 31 March 2009. It was accepted that if the names mentioned had not appeared on earlier lists, they would be new notifications. The primary judge rejected the contention that this did not amount to a notification for the purposes of s 40(3). He held (at [497] – [500]) that the statements by the UCPT that it was unaware of whether claims would be made by the persons whose names appeared on the list, did not disqualify the information provided from being notification of potential claims. He held that it was immaterial that a "problem" be notified in general terms, or that the quantum, character or identity of the claimants was unknown at the time of notification. He also held that the notification supplemented the earlier notifications, and alerted Allianz to a number of features regarding the magnitude of the problem. 7. On 17 June 2010, Ms Blacker provided a further letter of advice to Allianz in relation to the claim by TPC2. It concerned Mr Vance's making inappropriate sexual comments to TPC2 and a sexual assault on him by Mr Nisbett. The letter indicated, at paragraph 4.68, that it was likely that Knox would be found to be liable to TPC2 in respect of the psychiatric injuries which he sustained. 8. By an email of 2 July 2010 from Ms Blacker, it was indicated that Allianz had been notified of the making of a claim against Knox by TPC7. 9. On 6 August 2010, Allianz received notification of a claim by PTPC137, who alleged that, whilst a student at Knox, he had been sexually assaulted by Mr Nisbett. Allianz indicated that it would lodge the information as a notification and advise of the allocation of a reference number. This was accepted by the primary judge (at [512]) as notification of this claim. 10. By an email of 26 November 2010, Allianz received a copy of a letter of demand sent to Gadens on behalf of Knox, in relation to a claim by TPC9, who claimed to have been the victim of sexual assaults by Mr Nisbett. Allianz registered the claim as having been made on 31 March 2009, which was consistent with its having accepted the third bulk notification as an effective notice of the problem in relation to the persons identified on its list. 11. On 21 December 2010, Allianz acknowledged receipt of a notice of a claim by TPC10, and again accepted that it had been given notice of it by the bulk notification on 31 March 2009. Again, this was said to be consistent with its confirmation of the validity of the first bulk notification. 12. By an email on 17 February 2011, Allianz was informed that the UCPT was going to the market for its future insurance requirements. 13. Although not relied upon by the UCPT, on 24 February 2011, Proclaim Management Solutions (Proclaim), which had taken over the management of the UCPT's insurance claims, wrote to Allianz informing it that the sexual abuse allegations which had been raised related to the conduct of five former Knox teachers, namely Mr Treloar, Mr Stewart, Mr Nisbett, Mr James and Mr Vance. The letter claimed that Knox had attempted to provide as much information as possible in relation to claims and circumstances from which future claims might arise, and that Allianz had been provided with lists of names of persons who might bring them. It implied that Allianz was being given broad notification of the existence of facts and circumstances which might give rise to future claims. 14. The UCPT did, however, rely upon a letter from Allianz of 3 March 2011, in reply to Proclaim's letter and claiming that the alleged bulk notifications did not provide sufficient facts to explain in suitable detail why or how the persons mentioned were persons who might make claims against Knox. Internally, by an email of 17 March 2011, it was noted that Allianz would not be giving the UCPT any assurance of cover in relation to future claims, and on 29 March 2011, an email was sent to the UCPT advising it that Allianz was reserving its rights in relation to the indemnification of claims. The nature of the alleged representation 1. From this amalgam of documents and correspondence, the UCPT alleged that, from about, at the latest, 2007 and the provision of the first Blacker advice, Allianz was aware that Knox had engaged Mr Wilson to undertake an investigation and was aware of his findings and, thereafter, represented that it was still prepared to grant indemnity in relation to claims which might subsequently be made, to retain solicitors to defend them, and to make payments to resolve them. It also asserted that Allianz represented that it was prepared to accept that the notifications of potential claims were valid and effective. Finally, it submitted that Allianz represented that, despite its knowledge of LKA2, it was prepared to renew the UCPT's insurance on a yearly basis. It was then argued that the Court should find that Allianz represented to the UCPT, or that the parties proceeded on the common assumption, that Allianz would not rely upon the UCPT's awareness of LKA2 in 2004 or at all, for the purpose of s 40(3) or Exclusion 7(c). Was such a representation made to the UCPT? 1. A somewhat insurmountable difficulty with the UCPT's estoppel claim, and all claims based upon any alleged representation, is the absence of any evidence of any person from the UCPT, or even the UCA, to the effect that they perceived or understood any representation to the alleged effect had been made. 2. Its submissions were noticeably deficient in this respect. No one was identified as a person who believed that Allianz had received LKA2, read and considered its content with an appreciation of its significance, or had recognised that it afforded Allianz a right to rely upon a non-fulfilment of s 40(3) or on Exclusion 7(c). For this form of estoppel to have arisen on the basis on which the case had been advanced, it was necessary that such evidence be present in some form. The relevant persons at the UCPT would also have to be aware that the information received by Allianz was of such a nature that it might indicate Allianz's entitlement to rely upon the operation of s 40(3) or Exclusion 7(c). Finally, that person would be required to perceive from the circumstances that, if Allianz were aware of its right to rely on the UCPT's prior knowledge of LKA2, it was not intending to do so. None of this was shown. 3. It may be that one reason for the absence of such evidence was that it would necessarily have contradicted one of the UCPT's primary defensive claims, namely, that no person in relevant authority in the UCA or the UCPT was aware of LKA2 until some time in 2009. That state of affairs was a finding of the primary judge, and though it has been disagreed with, the absence of suitable evidence from the UCPT on this issue remains most significant. 4. It may well have been theoretically possible for persons from the UCPT to assert that they knew that Ms Blacker was Allianz's agent to receive notifications such as in the form of LKA2 and, from that, to assume that with such putative knowledge it was representing that it would not rely on the UCPT's knowledge of it to decline cover. However, if there were some person with that level of perception, they were not identified, they did not give evidence, nor were their thoughts on that issue recorded in any of the documents tendered in the case. 5. Similarly, there was also no evidence from anyone from the UCPT that any relevant person believed that because Allianz had not previously raised the fact that the UCPT was aware of LKA2, it would not rely upon that knowledge in the future. If it were the case that the UCPT, or anyone acting on its behalf, held that belief, evidence of it should have been forthcoming. If a witness had deposed to having such a belief, they could have been tested in cross-examination as to the veracity of the claim and their justification for any such belief. Such persons may have also been asked about how they believed that Ms Blacker was aware of LKA2 and, if she was, how they attributed that knowledge to Allianz. Whilst as a matter of law, the attribution of knowledge may arguably have been sufficient, to establish the existence of the alleged representation, it was necessary for the relevant person to adopt it. For all that is known, it may be that the relevant person from the UCPT had perceived that Allianz had not realised or appreciated the significance of LKA2 or of the UCPT's prior knowledge of it and, indeed, the consequences of that. 6. All that occurred in this case is that the UCPT has merely selected particular facts from the circumstantial context, which were then said to establish all the elements of estoppel and without any attempt to ground the alleged representation or common understanding on more than assumptions favourable to the submissions. Similarly, there was simply no evidence that the parties were prepared to adopt, as the conventional basis between them, a state of affairs which they believed to be contrary to the actual state of affairs: see Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641, 676. 7. In light of the above findings as to knowledge, it is unlikely that the UCPT's states of mind were relevant in any event. Alleged detriment 1. Similar issues arise in relation to the question of detriment. The essential operating element of estoppel is detrimental reliance, being that which the person who has acted in reliance upon a representation or assumed state of affairs will suffer if the person who has made the representation or who has agreed to an assumed state of affairs, is entitled to resile from that position: The Commonwealth v Verwayen (1990) 170 CLR 394, 429. That remains so even if relevant detriment might be calculated by reference to something other than damage which could be compensable in monetary terms: Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560, 598 [84]. However, that issue has no relevance in this case, where the evidence did not reasonably address any representation or an assumption of a state of affairs, or any action taken in reliance on it. Even if some of the alleged representations could be eked out from the facts, there was no evidence that anyone from the UCPT acted in reliance on it: cf Moratic Pty Ltd v Gordon (2007) 13 BPR 24,713, 24,724 [37]. 2. The detriment claimed in the UCPT's written submissions has been set out above. However, there was simply no evidence to support the contention that the UCPT, the UCA, or anyone acting on their behalf, refrained from acting in any of the ways alleged or would have pursued any opportunity or chance which is now said to be lost, had the alleged representation not been made or the assumed state of affairs not existed. 3. The first allegation of detriment, being an alleged inability to give LKA1 or LKA2 to the Ombudsman or more information to Allianz, lacks merit, not in the least because the alleged detriment would seem to have occurred before most of the alleged representations relied upon were made or the assumed state of affairs alleged came into existence. It is to be kept in mind that the UCPT had received LKA2 in the 2004/2005 policy period and there is nothing to show that any person on its behalf or that of the UCA in fact refrained from doing the acts referred to by reason of any representation by Allianz. 4. In relation to the second alleged detriment, being allowing Allianz to conduct the defence of the claims, it can be accepted that, had cover been declined from 2006 when the litigation of claims commenced, the UCPT would have been required to conduct the defences of the claims at its own cost and to settle them using its own money without reimbursement. It is not immediately apparent that the UCPT suffered any detriment by Allianz expending its resources in the defence of the claims and settling them with substantial payments. The contrary is true. There is no evidence that the UCPT would have done anything that would have placed it in a better position had it expended its own funds. This suggested detriment is frivolous and particularly so in the absence of evidence from any person in authority as to what the UCPT would have done. 5. The third alleged detriment was, in effect, that the UCPT lost the opportunity to negotiate whereby on its promise to continue to insure with Allianz, the latter would provide cover for the claims arising from the matters referred to in LKA2. There is no evidence to establish that the alleged opportunity to negotiate was worth anything. Indeed, the suggestion tends to diminish the nature of the "problem" or "hornets' nest" which LKA2 reveals. That has been discussed above and, on any view, the revelations from LKA2 represented a substantial risk of significant liabilities for any insurer. There was no evidence that, had Allianz declined cover in reliance on s 40(3) or Exclusion 7(c) earlier, anyone from the UCPT would have sought to negotiate with it or have recommended that course. There is also nothing to suggest that Allianz would have contemplated engaging in any meaningful discussion along those lines. This was another example of the advancement of wishful supposition in place of substantive matters that would support the proposition. 6. It was submitted that when Allianz came on risk in relation to the UCA, it was apparent that its professional indemnity section was averse to accepting, but that when the financial attractions of the taking on the wider cover for UCA were offered, it was prepared to do so. It was said that a similar state of mind on the part of Allianz in respect of accepting liability for future claims arising out of the circumstances for the benefit of retaining the UCA's custom, could be gleaned from the documents handed up in a supplementary appeal book. However, even if it might be said that in 1999 Allianz was prepared to accept the possible risk of claims being made against teachers from schools operated by the UCA in order to obtain larger custom, that cannot be compared with acceptance of liability to cover a large number of known substantial, certainly successful, claims. 7. This claimed aspect of detriment also suffers from the want of precision in the UCPT's case. Whilst the UCPT seemed to rely upon its alleged response to Allianz's alleged representations, the primary judge (at [667]) found that "Uniting Resources was and remains the entity within UCA with immediate responsibility for obtaining insurance on behalf of UCA". On that basis it would presumably be the responses of its members to Allianz's representations that would be relevant to these issues. There was no evidence of their identity nor of their position on any of the essential issues. 8. The Court was taken to a number of documents in support of the proposition that the UCPT might have sourced alternative insurance from other insurers in relation to sexual abuse claims. The first were the minutes of a meeting on 29 November 2004 between the UCA and its brokers, Marsh, though there is nothing in that document which suggests anything other than that a review was being undertaken in relation to the best way in which such cover might be obtained. That does not advance the proposition in any way. 9. Other documents referred to disclosed that at around the end of 2008 or the beginning of 2009, the UCPT was not adverse to going to the market for alternative insurance. Whilst that may well be so, there was no evidence that it could reasonably expect to obtain insurance over any historic claims as a result of the matters raised in LKA2, and it might be surprising if it were. All of this is ultimately irrelevant in the absence of evidence of reliance by the relevant persons in the UCA, the UCPT or Uniting Resources on any representation or assumed state of affairs or any evidence that those responsible for the insurance needs of the UCA would have acted in a particular manner in reliance upon either. 10. The fourth alleged detriment was that the UCPT lost the chance to move its account to new insurers who may have been prepared to provide cover in respect of the claims arising from the facts revealed by LKA2 as a price for obtaining the wider UCA business. Again, there was no evidence that this opportunity was of any worth. There was no evidence that there was any insurer which would even entertain such negotiations. Nor was there evidence of the premiums that would be payable in respect of such cover or that the UCPT, or any other entity within the UCA, would contemplate paying them. Submissions such as this are in that category referred to earlier in that, though they are unsupported by evidence, they are proffered in an attempt to encourage the Court to adjust the parties' rights by recourse to Solomonic notions of justice based on unestablished hypothetical scenarios. 11. In its written submissions, the UCPT suggested that evidence that it would have been able to obtain insurance cover had Allianz rejected its claims earlier, could be derived from its venture into the London market in 2011, where it obtained cover though the sexual abuse allegations in relation to Knox were widely known. That too is unsupported in essential features. There was no evidence of the nature of the insurance obtained, and whether it excluded claims arising from historical sexual abuse at the school. 12. The same applies in relation to the fifth alleged form of detriment, that is, the alleged loss of the chance of continuing to insure with Allianz on the basis that it continued to provide cover with continuous cover clauses. No evidence was adduced that this was a possibility at any time. Conclusion with respect to the claimed estoppel 1. The estoppel case advanced was most unsustainable for the reasons identified, and not solely due to the absence of evidence explained above in relation to the several critical issues. It also tends to follow from the UCPT's struggle with its role within the UCA structure and, in particular, its apparent lack of relevant participation in issues relating to the acquisition of insurance. As the primary judge found, that activity was the sole province of Uniting Resources and no attempt was made to show that it experienced any representations or would have acted as suggested in response to them. 2. Needless to say, accordingly the UCPT's reliance on estoppel must fail. Allianz v Delor Vue 1. It is appropriate at this point to refer to the decision in Allianz v Delor Vue, where the High Court addressed the nature of estoppel and waiver of rights. There, the insurer, Allianz, had accepted liability to indemnify the insured building owner in respect of damage sustained to its insured's property following a cyclone. At the time of its acceptance of liability, it was aware of its entitlement to decline cover based upon the insured's non-disclosure of certain material facts relating to defects in the insured buildings. Subsequently, it became apparent that the cost of remediating the insured buildings was substantially greater than as first assessed, and Allianz then sought to rely upon its original entitlement to decline cover. The Full Court of this Court held that Allianz was estopped from resiling from its initial agreement to provide indemnity: see Allianz v Delor Vue (FC). 2. A majority of the High Court (Kiefel CJ, Edelman, Steward and Gleeson JJ) disagreed and held that Allianz was not precluded from retracting its former acceptance of liability by relying upon the insured's non-disclosure as a result of waiver or estoppel. In relation to the former, their Honours recognised that, whilst waiver of a right is binding on the waiving party, it can be effectively retracted, in suitable circumstances. 3. A waiver of a legal right might become binding where the party affected by the abandonment of the right has acted to their detriment on the faith that the right was to be irrevocably abandoned. The retraction of the waiver is prevented by reason of estoppel. The facts before the Court, however, were not of that kind. 4. Of particular relevance to the present case is that the majority in Allianz v Delor Vue emphasised the need for a person seeking to rely upon an estoppel to establish it by evidence by showing, inter alia, adverse consequences or prejudice if the person making the representation were entitled to resile from it (at 486 [80]). In relation to the insured's claim that it had suffered a loss of opportunity and that this amounted to relevant detriment, the Court observed (at 487 [81]): It can also be accepted that Delor Vue could have established detriment by showing that it had lost an opportunity that was of real and substantial value, even if it could not prove that the opportunity would have realised a benefit. But Delor Vue had to prove that the opportunity was lost and that it was something of value. 1. Thus, on the issue of an alleged loss of opportunity, it was insufficient for the insured to point to some hypothetical possibility that it might have done something else if the insurer, rather than providing some indemnity under the policy, had refused to indemnify at all. There would need to be evidence that, by reason of the insurer going back on its indication that it would indemnify, it was put in some more difficult position than it would have been had no such promise been made. Their Honours found that, in the matter before the Court, rather than suffering a detriment, the insured actually obtained a benefit of the insurer undertaking work on repairing the damaged building before retracting the acceptance of liability. 2. A not dissimilar situation arises in the present case. Here, Allianz provided indemnity in relation to a number of claims and paid for their defence and it settled a number of them at considerable expense. It did not seek the return of its money and has indicated that it will not do so. On any view, the UCPT is well in advance of the position where it would have been had Allianz initially declined to indemnify. 3. The trial before the primary judge in the present matter occurred after the handing down of the decision of the Full Court in Allianz v Delor Vue (FC) and before its reversal in the High Court. That may explain why the UCPT adopted the approach that it did in the proceedings at first instance, that is, by merely alleging that it might have adopted a different course in response to the claimed representation rather than attempt to prove, in some way, that it would have and that it would be in a worse position if Allianz could resile from its acceptance of indemnity. That, of course, would not have solved its difficulties in proving the necessary details of the alleged representations. Ultimately, the UCPT does not reach that point. It was not even able to show that it, or any other relevant person, was aware of any representation by Allianz. That being so, questions of reliance and possible detriment are moot. Utmost good faith 1. The UCPT also sought to rely upon the duty of utmost good faith imposed upon Allianz by s 13 of the ICA. In doing so, it placed reliance on the decisions of the High Court in CGU Insurance Ltd v AMP Financial Planning Pty Ltd (2007) 235 CLR 1, 12 [15] and Allianz v Delor Vue. In the latter case, the Court (at 489 – 490 [92]) recognised that s 13 of the ICA has two aspects. The first is that the duty of utmost good faith is the principle on which contracts of insurance are based, and it thus assists in the recognition of implied duties; and, secondly, that it is an implied condition on the existing rights, powers and duties governing the manner in which the parties act towards each other in the performance of contractual duties and remedies. Though the Court observed that the duty applies symmetrically as between the insured and the insurer, it might now be thought that the effect of both the terms of the ICA and the manner of its interpretation, has resulted in the obligations being borne, in some respects, more heavily by insurers than insureds. 2. Nevertheless, in relation to the impact on insurers, in Allianz v Delor Vue (at 491 [96]) the majority described its essence in this way: rights and powers must be exercised, and duties must be performed, "consistently with commercial standards of decency and fairness" (CGU Insurance Ltd v AMP Financial Planning Pty Ltd (2007) 235 CLR 1 at 12 [15]) as distinct from standards of decency and fairness more generally. 1. It then accepted (at 492 [99]) that there cannot be an absolute duty upon parties to an insurance contract never to resile from any representation made to the other. It might be reasonable to depart from an insignificant representation or one which has not caused the other to act to their prejudice. Their Honours held (at 492 – 493 [99] – [104]) that s 13 did not impose upon an insurer the obligation not to resile from a representation which it made in the course of the performance of a policy unless there was a reasonable basis for doing so. In the result, there was no breach of the duty of utmost good faith in Allianz's there resiling from its representation as to its virtual benevolence in relation to cover on the claim, when circumstances were later found to make that benevolence substantially more costly. 2. The circumstances of the present case do not speak of a breach by Allianz of its duty of utmost good faith. Whilst it may have now indicated that it will not indemnify certain claims yet to be finalised, it has not done so in relation to the indemnity which it has actually paid to date, and it has not sought to recoup the substantial amounts which it has paid. Rather it has indicated that, from a particular point in time, it would not be further indemnifying based upon its entitlement to do so by reason of Exclusion 7(c). In doing so, it was acting entirely within its rights consequent upon Knox, the School Council and the UCA foregoing their rights to extend the 2004/2005 policy by giving notice of LKA2 in that policy period. It is entitled to refuse to accept the claims which it has rejected and no detriment or prejudice has resulted from its declinature. 3. The circumstances of the present case are not wholly dissimilar in this respect to those which existed in Allianz v Delor Vue. Here, as more and more sexual abuse claims against Knox emerged, Allianz considered it prudent to investigate and consider the ramifications of the knowledge which the UCA and the UCPT or any of the insureds had in relation to such matters and the date from which it had that knowledge. Upon consideration, it identified its entitlement to refuse to indemnify the UCPT in relation to the growing number of claims. In circumstances where the UCPT will not suffer any relevant prejudice from Allianz's resiling from its former position, there was no failure by it to comply with commercial standards of decency and fairness. Waiver and election 1. The UCPT only faintly advanced claims of waiver and election as separate grounds on which Allianz was to be held to a virtual waiver of its rights as the result of its agreement to indemnify in respect of earlier claims. That said, the submissions provided no justification as to how or why Allianz should be denied its entitlement to rely on Exclusion 7(c) as it now does. As was the case in Allianz v Delor Vue, there was nothing to justify preventing it from resiling from its former position. In the absence of anything which prevented it from adopting a different course, it could not be said to have waived its entitlement to do so, and nor has it irrevocably made an election in that respect. Relief 1. In the result, the orders of the learned primary judge should be set aside to the extent sought. Allianz sought a declaration that it was not obliged to indemnify under the policy and, in the circumstances, I would be prepared to make such a declaration. 2. Allianz should be entitled to its costs of the appeal and of the hearing before the primary judge. I certify that the preceding five hundred and eighty-one (581) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Derrington. Associate: Dated: 7 February 2025 REASONS FOR JUDGMENT COLVIN AND MCEVOY JJ: 1. For the twelve-year period from 31 March 1999 to 31 March 2011, successive policies of insurance providing professional indemnity cover were issued to the Uniting Church in Australia. Allianz Australia Insurance Limited either issued those policies or, for the earlier years, was responsible for the liabilities under the policies as issued. The description of the Insured in the policies was very detailed. At this stage it is sufficient to observe that it included the Uniting Church in Australia Property Trust (NSW) (UCPT), an entity established by the Uniting Church in Australia Act 1977 (NSW). 2. A number of former students at Knox Grammar School and parents of some of those students brought claims in respect of historical sexual abuse and physical abuse against UCPT. It settled some of them. Substantial payments were made in settlement. Allianz provided indemnity in respect of amounts paid by way of settlement of some claims. However, a point was reached where Allianz claimed that, in the events which had occurred, there had not been proper notification of facts that may give rise to claims. Allianz contended that, on or about 1 May 2013, it discovered, for the first time, the extent of prior awareness on the part of relevant people of facts likely to give rise to claims. It claimed that UCPT had failed to notify those facts in a timely manner. It declined all further claims on that basis. 3. UCPT brought proceedings in this Court against Allianz claiming relief on the basis that it was entitled to indemnity under the policies in respect of amounts paid by way of settlement of claims as well as declarations to the effect that it was covered under the policies for claims by others who had been identified as potential claimants. Allianz defended the claims but did not seek to recover any of the amounts that had already been paid. 4. Following a trial, the claims by UCPT were substantially upheld. The declarations granted included declarations substantially to the effect that Allianz is required under the policies to indemnify UCPT for claims arising from sexual or physical assault by former teachers of Knox. The breadth of the declarations reflected the breadth of the findings by the primary judge as to the notification of facts which may give rise to claims by UCPT. 5. Allianz has appealed. In addition to opposing the appeal grounds, UCPT contends that the reasoning of the primary judge should be upheld in whole or in part on various additional grounds. 6. We have the very considerable advantage of being provided with a draft of the reasons of Derrington J. We agree that the appeal should be allowed. Respectfully, we also agree with much of the reasoning of his Honour as to why that is the appropriate outcome. However, in certain respects, particularly as to the significance of UCPT's role in dealing with claims against the Uniting Church and aspects of the way in which s 40(3) of the Insurance Contracts Act 1984 (Cth) should be approached, we would reach the same conclusion by different reasoning. We have also reached a different view as to the scope of s 52 of the Act. For those reasons, we write separately. 7. As Derrington J has explained, the contents of an investigation report prepared by Mr Grahame Wilson, a well experienced and licensed private investigator with LKA Risk Services Pty Ltd is central to the appeal. 8. Mr Wilson's report concerned matters that had been raised following an earlier investigation undertaken by him in respect of allegations made against a teacher at the school, Mr Adrian Nisbett, about his conduct towards a student in 2002. After that earlier investigation, Mr Weeks became aware of historical allegations relating to Mr Nisbett's conduct in 1986. As a result, Mr Wilson was engaged to investigate those additional allegations and his report of that second investigation was provided to Mr Weeks on 7 May 2004. In the appeal, the parties referred to the report and accompanying materials as LKA2 with the earlier report being referred to as LKA1. 9. As is explained by Derrington J, before the primary judge those who had made claims were identified using the abbreviation TPC (third party claimant) and those who had been identified as possible claimants were identified using the abbreviation PTPC (possible third party claimant). We also adopt the same terminology, noting that in some respects confidentiality orders in the appeal were not as broad as those that pertained before the primary judge. The policies of insurance 1. The relevant insurance policies were in substantially similar terms. It is sufficient for present purposes to refer to the terms of the professional indemnity insurance primary layer policy issued for the year ending 31 March 2005 (identifying any material differences between policies where relevant). 2. The cover provided by the policy was for 'all sums which the Insured shall become legally liable to pay as a result of any Claim or Claims first made against the Insured during the Period of Insurance for breach of professional duty arising out of any negligence whether by way of act, error or omission on the part of the Insured, in the conduct of the Insured's Profession as specified in the Schedule in or from the Institution named in the Schedule'. 3. The expression 'Claim' was defined to mean '(i) a written or verbal demand by a third party for compensation or damages; or (ii) a civil proceeding brought by a third party for recovery of compensation or damages, in respect of an actual or alleged breach of professional duty, wherever committed'. That is to say, it was a claims made policy that provided coverage for claims actually made during the period of the policy. The coverage provided was not expressed in terms of claims made and notified to Allianz as the insurer. However, as explained below, it was a condition of the policy that claims made must be notified. 4. The policy schedule described the Insured as: The Uniting Church in Australia including: * The Uniting Church in Australia Property Trust (NSW) * The Uniting Church in Australia Property Trust Victoria (but excluding Epworth Foundation) * The Uniting Church in Australia (Australian Capital Territory) Property Trust * The Uniting Church in Australia Property Trust Tasmania * The Uniting Church in Australia Property Trust Northern Territory * The Uniting Church in Australia Property Trust Western Australia, and as further described in Annexure A 1. Annexure A included a very detailed list of various bodies formed by or on behalf of the Insured as well as extended descriptions of their officers and employees. The extended definition of the Insured included a proviso which, amongst other things, stated that 'in relation to the foregoing … [such] person(s) shall comply with and be subject to the Terms, Conditions, Exceptions, Provisions and memoranda of this Policy insofar as they can apply'. That is to say, the policy made clear that each of the various bodies, officers and employees were required to comply with the terms of the policy. It was not the case that their coverage was provided on the basis that performance of the terms and conditions of the policy was to be undertaken by those with overall administrative authority for the affairs of the Uniting Church. In particular, it was not the case that UCPT was entrusted with that responsibility. Rather, each insured described in the definition of the Insured was required to comply with the policy. 2. The description of the Insured included various entities, officers and employees of the Uniting Church, its agencies and its institutions. However, it also included other emanations of the Uniting Church that were not legally recognised entities. The overall description of the Insured was 'the Uniting Church in Australia', a term which is expressed to include UCPT and other similar property trust entities in other states and territories of Australia. As has been mentioned, the definition referred to the Uniting Church (including the property trusts) 'as further described in Annexure A'. The Annexure is long and detailed. Included within it are 'unincorporated associations' organised for the purposes of providing educational services, facilities or activities. Knox was conducted by such an unincorporated association. Therefore, the Uniting Church as the Insured was expressed to include both UCPT and Knox as well as many other named or described entities, officers and employees. The significance of these aspects is addressed below. 3. Later versions of the policy had additional wording that might also apply to Knox. The policy that applied from 31 March 2009 had a different form of wording for the description of the Insured. It no longer began by referring to the Uniting Church in Australia. Instead, it listed a number of the property trusts (including UCPT) and various emanations of the Uniting Church as the 'Name of Insured' and then added descriptions of those that were included. Significantly for present purposes, those policies continued to refer to unincorporated associations organised for the purposes of providing educational services, facilities or activities. 4. The policy ending 31 March 2005 described the 'Insured's Profession' as: Religious organisation with charitable activities, hospitals, nursing homes, aged care, schools, job search, social welfare, refuge home landlords, property owners, tenants, co-operatives, assembly agencies and joint ventures. (emphasis added) 1. There was a definition of 'the Insured' in the body of the policy which was expressed in the following terms: The expression 'the Insured' shall mean the persons and entities named as the Insured in the schedule and in Annexure A but in each case only in respect of work carried out in the conduct of the Insured's Profession by the Insured. (emphasis added) 1. This provision is to be read having regard to the following proviso at the end of Annexure A in each of the policies: Where the 'Insured' is comprised of more than one party the words 'the Insured' shall be considered as applying to each party comprising the Insured in the same manner as if that party were the only party named herein as the Insured. 1. Accordingly, the policy applied to each person and entity named in the schedule and in Annexure A (including unincorporated entities like Knox) in respect of the work carried out by that person or entity in carrying out the 'Insured's Profession'. In the case of Knox, that was the activity of a school. 2. The Conditions for the policy included a condition as to 'Notification of Claims' as follows: Upon the making of a Claim against the Insured, the Insured shall notify the Company in writing as soon as practicable after the Claim is made and shall provide to the Company whatever information relating to the Claim that is in the Insured's possession. For the purpose of this condition only, 'the Insured' shall mean 'the General Secretary of the Synod'. (emphasis added) 1. Despite the quotation marks, the term 'the General Secretary of the Synod' was not separately defined in the policy. There is an issue as to the meaning and effect of the provision referring to the General Secretary of the Synod as the Insured for the purposes of the provision as to notification of claims. 2. The Exclusion as to 'Prior Claims & Circumstances' (being Exclusion 7) was as follows: any Claim, fact, circumstance or occurrence; a. in respect of which notice has been given to the Company or any other insurer under a previous insurance policy, or b. disclosed or communicated to the Company in the proposal or declaration or otherwise before the commencement of the Period of Insurance, or c. of which the Insured is aware before the commencement of the Period of Insurance, which may give rise to a claim. This exclusion is independent of and shall not affect the Company's other rights regarding misrepresentation and non-disclosure; (emphasis added) 1. It may be noted that Exclusion 7 was not expressed in terms of what was known to the General Secretary of the Synod. 2. It is the emphasised language of Exclusion 7c that is of significance in the appeal. 3. As has been observed, the terms of the policy provided coverage for claims actually made, whether by a demand for compensation or damages or by a civil proceeding. Further, the obligation to notify arose upon the making of a claim. However, the exclusion in relation to prior claims and circumstances purported to apply not only to claims of which the Insured was aware prior to the policy period but also any 'fact, circumstance or occurrence … of which the Insured is aware before the commencement' of that period 'which may give rise to a claim' (emphasis added). This aspect of the policy assumes significance for a number of the issues that arise on the appeal. 4. In addition, the notification provision is an important aspect of the policies that changed during the course of the twelve-year period of coverage. For example, the policy to 31 March 2004 contained the following provision as to notification of claims: Upon the making of a claim against the Insured, or the making of any allegation or the discovery of any circumstance which indicates the possibility of a claim arising, the Insured shall notify the Company in writing immediately and shall provide to the Company whatever information relating to the claim or possible claim is in the Insured's possession. For the purpose of this condition only, 'the Insured' shall mean 'the General Secretary of the Synod'. (emphasis added) 1. The same notification provision applied in the previous year. Before that the policies required notification of the making of a claim against the Insured 'or the making of any allegation or the discovery of any circumstance which indicates the possibility of a claim arising'. So, before the policy year to 31 March 2005, the notification provisions applied in much broader circumstances than the 'making of a Claim against the Insured'. 2. Finally, the policies included retroactive date provisions. Each of the policies for the years to 31 March 2004 and 2005 contained an exclusion 'for any act, error or omission committed or alleged to have been committed prior to the retroactive date, if any, specified in the Schedule'. In the schedule, the retroactive date was specified as being 'UNLIMITED, excluding known claims and circumstances including "run off" cover for all previous entities or activities'. The competing contentions for the parties did not seek to attribute any particular significance to the language of these retroactive date provisions. Rather, they focussed upon the nature of the disclosure obligations and the language of Exclusion 7c. 3. Later policies for the years ending 31 March 2008, 2009 and 2010 contained continuous cover provisions. Those provisions provide cover in those years for claims made in the relevant year that arise out of facts or circumstances of which the Insured was aware during a previous period of coverage where there would have been indemnity under that previous period if the claim had been notified during that previous period of coverage. Section 40 of the Insurance Contracts Act 1. As to the notification of claims, s 40 of the Insurance Contracts Act provides: (1) This section applies in relation to a contract of liability insurance the effect of which is that the insurer's liability is excluded or limited by reason that notice of a claim against the insured in respect of a loss suffered by some other person is not given to the insurer before the expiration of the period of the insurance cover provided by the contract. (2) The insurer shall, before the contract is entered into: (a) clearly inform the insured in writing of the effect of subsection (3); and (b) if the contract does not provide insurance cover in relation to events that occurred before the contract was entered into, clearly inform the insured in writing that the contract does not provide such cover. Penalty: 300 penalty units. (3) Where the insured gave notice in writing to the insurer of facts that might give rise to a claim against the insured as soon as was reasonably practicable after the insured became aware of those facts but before the insurance cover provided by the contract expired, the insurer is not relieved of liability under the contract in respect of the claim, when made, by reason only that it was made after the expiration of the period of the insurance cover provided by the contract. (emphasis added) 1. The terms of s 40 must be understood in light of the reasoning in Newcastle City Council v GIO General Ltd (1997) 191 CLR 85. In that case, the High Court was concerned with a 'claims made' policy which included coverage for claims arising out of any negligent act, error or omission by the insured. During the period of cover, the Council notified facts which might give rise to liability. Subsequently, claims were made against the Council outside the period of cover. The insurer denied liability for claims made outside the period of the policy. The insured relied upon s 40(3). By three separate judgments, the High Court concluded that a literal interpretation of the terms of s 40 should not be adopted. The effect of the reasons given is that s 40(3) operates as a form of statutory extension of cover that extends protection under a claims made policy or a claims made and notified policy to provide coverage (subject to any other policy limits) where there is compliance by the insured with s 40(3) even though the relevant claim is actually made after the period of the policy has expired. 2. In consequence, the coverage afforded by the policies in the present case is for (a) claims made during the policy period (there being a condition that such claims made must be notified in writing as soon as reasonably practicable after the claim is made); and (b) claims made after the policy period to which s 40(3) applies because, during the policy period, facts that may give rise to the claim were notified as soon as was reasonably practicable after the Insured became aware of those facts. 3. As will emerge, issues arise as to the consequences of any instance where coverage was not extended by operation of s 40(3) because the Insured did not give notice in writing of facts that may give rise to a claim as soon as was reasonably practicable after the Insured became aware of those facts. In particular, there are issues as to the consequences for subsequent policies of insurance covering the same risk on a claims made basis. There are separate issues concerning Exclusion 7c which deals with matters of which the Insured was aware before entering into the policy. The nature of UCPT's case before the primary judge 1. The primary judge described the reliance by UCPT upon notification of facts that might give rise to claims within the meaning of s 40(3) of the Insurance Contracts Act as the 'fulcrum' of its case. The case advanced by UCPT was summarised by his Honour as being based upon a submission that the various notifications it had given were of facts that had been notified as soon as was reasonably practicable after UCPT as insured became aware of those facts: PJ[5]‑[7]. Accordingly, UCPT's case was said to be based upon the statutory extension with the awareness of UCPT being what was relevant for the purposes of the statutory extension. 2. Further, it was UCPT that had responded to the claims that had been settled. It had paid the money and was seeking indemnity in respect of the amounts paid by way of settlement. It was also seeking indemnity on the basis that it had responded to other claims and would respond to any further claims of sexual abuse at Knox. Principal contentions in the appeal 1. The principal contention advanced by Allianz in the appeal is to the effect that the contents of LKA2 were not notified as soon as reasonably practicable after 'the Insured' became aware of those facts. In oral submissions for Allianz it was said that: at its core, the appeal involves what we say the primary judge should have found was knowledge by the UCPT of circumstances likely to give rise to claims, being the claims that have emerged and will continue to emerge, and that was knowledge of facts arising out of an independent investigation report commissioned by and given to Knox Grammar School in 2004. 1. In consequence, it is said that further notifications by UCPT that occurred in subsequent years either (a) were not within the terms of s 40(3) of the Insurance Contracts Act; or alternatively (b) occurred in circumstances where Exclusion 7c was engaged because, by the time of those later notifications, the claims arose out of a fact, occurrence or circumstance of which UCPT was aware before the period of insurance under the policy that was in force at the time of notification. The primary judge is alleged to have been in error in not making findings to that effect. 2. If neither of the above alternatives is accepted, then Allianz contends that the primary judge should have held that almost all claims as found to have been notified are covered by the policy for the year to 31 March 2009 (by reason of the terms of the notifications given in that period). On that basis, Allianz contends that the primary judge was in error in finding that the notification of the claims was spread over the three policy years to 31 March 2008, 2009 and 2010. The contention advanced by Allianz as to this alternative part of its case is that 'bulk notifications' that were made on 31 March 2009 (and therefore in the period covered by the policy for the year to 31 March 2009) operated as a form of 'hornet's nest' notification that would mean that all claims and potential claims (save for two individual claims covered by earlier notifications) would fall within the terms of the policy for that single year. It is a contention that does not seek to challenge the findings by the primary judge as to what occurred in relation to notification. Rather, it contends that, as a matter of law, his Honour should have concluded, based upon the findings made, that save for two individual claims, all claims were notified in the year to 31 March 2009. 3. As to LKA2, the primary judge found (at [460]) that: When the 2004 LKA Reports and Materials were furnished to Mr Weeks in May 2004, it is notable that the only complainant was TPC1's mother, and the complaint, unlike the subject matter of the LKA2 report, was contemporaneous in its timing. With the exception of that complaint, the 2004 LKA Reports and Materials broadly described historical rumours which had laid dormant for over 20 years. Although Mr Wilson had interviewed TPC2 and obtained a first-hand account of an incident involving Nisbett, as I have recorded elsewhere in these reasons …, TPC2 gave no indication that he intended to make a claim, or that the matters the subject of his interview might give rise to a claim. A 'bare possibility' of a claim is not sufficient. The facts contained in the 2004 LKA Reports and Materials do not admit of more than a bare possibility of a claim because of the absence of a contemporaneous complaint. The prospect of any person coming forward with a claim after two decades against KGS teachers was remote. (emphasis added) 1. As to when the 'problem' became known and was notified, the central findings by the primary judge were as follows (at [461]-[464]): By the 2008-2009 policy period, TPC1's claim had morphed into an allegation of sexual assault; the NSW Police had formed of Strike Force Arika to investigate sexual abuse of students; NSW Police had arrested and charged Nisbett, Treloar and Stewart; a search warrant had been served by NSW Police; and, importantly, there was widespread media reporting of the arrests and the active encouragement by the police for victims of sexual abuse to come forward. No longer were the allegations purely historical in nature and distilled in a confidential report. The arrests and the media reporting of their subject matter gave an immediacy to the historical complaints contained in the LKA Reports and Materials. To the extent necessary, I accept UCPT's submission that only at that point did it become a 'problem' that might give rise to claims, which the UCPT notified Allianz of as soon as was reasonably practicable within the meaning of s 40(3). I am strengthened in this conclusion for an independent reason. As I expressed to the parties during the hearing, attitudes to victims of sexual abuse in this country changed radically between the years 1984 and 2004, and perhaps again between the years 2004 and 2009 … Although it is difficult to pinpoint such changes, there is little controversy in observing that gradually, a greater public awareness has surfaced as to the possibility of victims or alleged victims of institutional sexual abuse coming forward to make complaints … It is important not to approach the consideration of these matters ahistorically or with hindsight bias. The mere fact that a complainant did not come forward at a time when attitudes towards the institutional abuse of children were somewhat different is explicable. From an institutional perspective, this shift in attitudes might also explain changes in the suggested remedial response taken by schools when faced with allegations that certain teachers or staff sexually abused students. Seen in this light, it is not difficult to imagine the response to the contents of the LKA Reports and Materials being very different today, compared to the years 2003-2004. The objective question of characterisation that the terms of s 40(3) pose necessitates a consideration of such context. For these reasons, the first and second bulk notifications were effective for the purposes of s 40(3) as notifications of facts that might give rise to claims against UCPT by those claimants who were expressly identified in the letters and who later advanced claims against UCPT for loss arising from sexual or physical assault by former teachers of KGS; and by any other claimants sharing the particular characteristics identified in the letters, namely, former students of KGS who suffered loss arising from sexual or physical assault by Treloar or Stewart. 1. These findings were challenged by Allianz in the appeal. 2. Further, by reason of the competing contentions of the parties in the appeal, distinctions between the knowledge of those at Knox (particularly its headmaster at the time of the notifications, Mr Weeks) on the one hand and knowledge of the General Secretary of the Synod or officers of UCPT on the other hand may have significance. These are said to be matters on which the primary judge should have made findings. 3. For its part, UCPT sought to support the findings by the primary judge as to when notifications were given and that the requirements of s 40(3) of the Insurance Contracts Act had been met. Further, UCPT contended that there were agreed arrangements that governed the notification of claims under the policies having regard to its character as a composite policy governing many institutions of the Uniting Church across Australia and by which the property trusts established by legislation in each state were named in the schedule to each policy as insureds. It was claimed that those arrangements only required notification of matters of which the General Secretary of the relevant Synod was aware, relevantly for present purposes the Synod in New South Wales. Viewed in that context, it was said that the primary judge's findings concerning notifications having been made as soon as was reasonably practicable after the Insured became aware of those facts, were correct. 4. Submissions were also put for UCPT to the effect that the case now advanced seeks to give a significance to awareness of the contents of LKA2 that was not put to the primary judge and, for that reason, aspects of its argument on appeal should not be entertained because, in substance, they amount to a new case not run below. 5. Further, to the extent that there was any failure to give notice of facts that might give rise to a claim (contrary to UCPT's principal position) then UCPT contended that s 54(1) of the Insurance Contracts Act applied to prevent the insurer from refusing to pay the claim because the failure to notify occurred after the contract of insurance was entered into and was not an 'act that could reasonably be regarded as being capable of causing or contributing to a loss in respect of which insurance cover is provided by the contract'. 6. UCPT also claimed, in the alternative, that any facts that might give rise to a claim that were known by reason of the contents of LKA2 were limited to claims by TPC2 or PTPC3 in connection with sexual misconduct by Mr Nisbett only (alternatively, claims by current or former students concerning sexual misconduct by Mr Nisbett but not any other staff member). 7. UCPT also claimed that Exclusion 7c was void by operation of s 33 or s 52 of the Insurance Contracts Act. 8. Section 33 is in the following terms: The provisions of this Division are exclusive of any right that the insurer has otherwise than under this Act in respect of a failure by the insured to disclose a matter to the insurer before the contract was entered into and in respect of a misrepresentation or incorrect statement. 1. Section 52 prohibits contracting out of the operation of the Insurance Contracts Act. 2. UCPT also claimed that Allianz was estopped or otherwise precluded by reason of its duty of utmost good faith towards UCPT to deny the validity of the notifications under s 40(3) or claim that Exclusion 7c applied. 3. Finally, UCPT claimed that if the challenge by Allianz to the primary judge's finding that UCPT had notified facts which might give rise to claims by current or former students arising from sexual misconduct by Mr Nisbett as soon as reasonably practicable by notifying those facts in the policy for the year to 31 March 2008 is upheld then it should be found that UCPT notified those facts during the policy year to 31 March 2007. Relevant factual findings by primary judge 1. The following chronology is taken from findings of the primary judge that were not in issue in the appeal. 2. In 1999, UCPT notified Allianz of a letter dated 30 June 1999 that Knox had received from PTPC1 in which he said that during his attendance as a student at Knox between 1972 and 1977 he 'was one of several little boys that was sexually assaulted by a housemaster': PJ[353]. 3. In 2002, TPC1 had been a student at Knox. 4. In November 2003, TPC1's mother made a complaint to a Mr Peter Crawley the then headmaster at Knox about conduct of Mr Nisbett towards her son that had occurred at the end of the 2002 school year. 5. Mr Crawley engaged LKA Risk Services Pty Ltd to investigate. 6. Mr Wilson conducted an investigation and provided LKA1 to Mr Crawley in December 2003. 7. A summary of the allegations against Mr Nisbett was reported to Mr Steve Piening who worked in the Synod office in New South Wales. He informed UCPT's broker, Marsh. Marsh provided two memoranda to Allianz relating to a potential claim by the mother of TPC1 concerning conduct by Mr Nisbett at the end of the 2002 school year. The memoranda were referred to by the primary judge as the 2003 Memo: PJ[91]-[92], [362]. 8. There was a further memorandum dated 16 January 2004 in evidence before the primary judge. It also related to the potential claim by the mother of TPC1. The memorandum was referred to by the primary judge as the 2004 Memo. It enclosed an email referring to an 'investigator's report' (that is, LKA1): PJ[93], [363]-[364]. 9. In early 2004, Mr Weeks replaced Mr Crawley as headmaster of Knox: PJ[94]. 10. On 15 January 2004, Mr Martin Gooding (from Knox), Mr John Cameron (the then Finance Director at Knox) and Mr Piening from the Synod office were participants in email communications referring to allegations by TPC1 against Mr Nisbett and an investigator's report (that is, LKA1) as well as the need to brief Mr Weeks to ensure that action was taken and the Ombudsman was notified: PJ[95]. 11. On 27 January 2004, Mr Cameron had discussions with PTPC41 regarding Mr Nisbett, including 'behavioural issues that might give rise to concern' and the 'Boarding House "murmurings" relating to Nisbett': PJ[96]. 12. By February 2004, Mr Weeks was aware of possible allegations against Mr Nisbett of child abuse dating back to the 1980s and Mr Wilson was promptly engaged to undertake a further investigation: PJ[98]‑[99]. Mr Wilson undertook an extensive investigation. He interviewed a number of people including the headmaster at the time of the historical allegations, Dr Ian Paterson (who had been headmaster from 1969 to 1998): PJ[97]-[125]. 13. The investigation obtained information concerning alleged conduct by other members of staff at Knox. 14. On 7 May 2004, Mr Wilson delivered LKA2 to Mr Weeks. It comprised over 1,500 pages of materials and included a supplementary risk assessment report: PJ[126]-[127]. 15. The executive summary to LKA2 related only to the allegations against Mr Nisbett: PJ[128]. 16. Though not the subject of express findings by the primary judge, as is discussed below, the LKA2 report related only to Mr Nisbett. However, the detailed materials (including transcripts of interviews) contained references to other allegations involving other staff members at Knox that had surfaced during the investigation. 17. Returning to the findings of the primary judge, LKA2 (and further information) was provided to the Ombudsman by Mr Weeks in June and July 2004: PJ[129]-[132]. There was a statutory obligation to report information of that kind to the Ombudsman. 18. On 9 November 2004, Mr John Oldmeadow, the Executive Director of the Synod, sent an email to Mr Weeks. It concerned informant PTPC41. He had been interviewed as part of the investigation conducted by Mr Wilson that resulted in LKA2. The email from Mr Oldmeadow to Mr Weeks was in the following terms (reproduced at PJ[133]): As regards to his [PTPC41's] information about the other matters within the school, I am unclear about how much more information he has. In the conversations he appears to alternate between inferring there is more and, as he did today, claiming that he had passed on everything to his superiors at the school (although some of this information may have been well before your time as Headmaster). I pressed him to consider providing anything more and he reiterated that he had passed on everything at some time or other. My feeling is that the key area where he may have been able to assist is in the provision of names of others who may have more information but at this time he is not willing to involve others. His final assertion was that he had given all the information that he had at the time each event happened and that it should be on the record in the school somewhere. If he doesn't change his mind, and I think such a change is unlikely, l believe that we / you have done all that is possible to pursue any and all references or hints of untoward or illegal activity at the school recently or in the distant past. [PTPC41] has provided much detail to you and the investigator previously, I don't think there is much more that you or the school or even the police can do to pursue this at this time. I may make a follow up call to [PTPC41] in several weeks, in the meantime, I think the matter rests and the meeting on Friday 18th will not take place. 1. Some two years later (in late 2006), Mr Weeks was told of an incident in 1988 involving another teacher, Mr Craig Treloar: PJ[138]. Not long after that, TPC1's mother made an allegation that Mr Nisbett had sexually assaulted her son: PJ[140]. 2. On 14 December 2006, the further allegation was notified to Allianz by Marsh as UCPT's broker. The email notification also referred to the 2003 Memo and the 2004 Memo. It said 'This circumstance was notified to you … by mem dated 18 December 2003 … An update was then forwarded 16 January 2004'. As to those memoranda, the broker said: 'As no further information was received from the school our files were closed in May 2005': PJ[142]-[143], [365]. 3. On 15 December 2006, Allianz responded stating that it did not have the earlier notification and sought copies, which were then provided by Marsh to Allianz: PJ[144]-[146], [366]-[367]. 4. On 15 December 2006, Allianz informed Marsh that it had opened a file for the claim: PJ[368]. 5. On 31 January 2007, Mr Oldmeadow of the Synod emailed Mr Weeks regarding TPC1's claim, noting that by that time Mr Weeks had 'notified [the] School Council, the Uniting Church and the Ombudsman' about TPC1's claim: PJ[147]. 6. On 2 February 2007, Marsh forwarded to Allianz an email which included an email from Mr Oldmeadow of the Synod which was a note of a telephone conversation with Mr Weeks reporting his meeting with TPC1 on 17 January 2007 regarding the incident of sexual assault in late 2002 while TPC1 was a student at Knox: PJ[149], [395]. The email also conveyed the substance of a conversation with a Mr Driscoll of UCPT in which Mr Driscoll had said that the TPC1 claim had been settled for $20,000 and that Mr Driscoll had indicated that in the course of the investigation by Knox, another student had come forward to report he had also been molested by Mr Nisbett but did not wish to pursue the matter: PJ[396]. 7. The 2003 Memo and the 2004 Memo were received by Allianz on 18 December 2003 and 16 January 2004 respectively: PJ[376]-[384]. 8. The communication to Mr Oldmeadow in February 2007, of the first hand report by TPC1 of a sexual assault by Mr Nisbett 'was a significant moment' for Mr Oldmeadow: PJ[397]. Based upon the way he responded to the report, the primary judge concluded that, as at that time, Mr Oldmeadow 'was unfamiliar with the contents of LKA2': PJ[398], [410]-[411]. 9. On 2 February 2007, Allianz was notified of the fact that Mr Nisbett was alleged to have sexually assaulted two former students, being TPC1 and another unnamed student: PJ[401]. The primary judge made the following finding concerning the notification to Allianz of the existence of LKA2 (also at PJ[401]): I accept the UCPT's submission that by this communication, Allianz was notified of the existence and subject matter of LKA2, including that it was concerned with allegations of sexual assault against Nisbett concerning multiple former students. 1. On 28 February 2007, TPC1's solicitor sent a letter of demand addressed to Mr Weeks: PJ[150]. 2. On 7 March 2007, Allianz instructed Ms Wendy Blacker, a solicitor, to act for UCPT (as 'the Insured') on the TPC1 claim: PJ[151]-[152], [402]. 3. On 15 March 2007, Inspector Elizabeth Cullen of New South Wales Police and Mr Weeks had a telephone conversation in which Inspector Cullen said: 'I hope these people don't still work at Knox - Nisbett …, Barratt …, Stewart … and Treloar …': PJ[153]. 4. On 21 March 2007, the Knox council held a private meeting to discuss the allegations against Mr Nisbett. At that meeting, Mr Weeks spoke of his conversation with Inspector Cullen: PJ[155]. 5. On 4 April 2007, Mr Oldmeadow invited Ms Blacker to attend Knox, informing her that: 'there is a significant deposit of information and documentation held at Knox Grammar School. John Weeks believes that it may be most appropriate for you to visit the school and examine the material onsite': PJ[157]-[158], [409]. 6. Ms Blacker attended at Knox and inspected the whole of LKA1 and LKA2 on 10 April 2007: PJ[159], [414]-[415]. 7. Ms Blacker provided letters of advice in June and November 2007. The letters of advice indicated a 'problem' concerning Mr Nisbett's conduct at Knox that was inherently likely to give rise to further claims: PJ[161]-[162], [165]. 8. On 2 December 2007, Ms Blacker emailed UCPT's broker, stating (at PJ[166]): During the course of acting in this matter it has become evident that there may well be other incidents that potentially could give rise to claims, although I think from your email correspondence you are already aware of this. I will also alert Allianz and let the Church know that I have done so. The Church is aware of this. 1. On 18 December 2008, Ms Blacker sent pre-mediation advice to Allianz regarding TPC1's claim and the claim was settled by UCPT: PJ[169]. 2. In February 2009, the New South Wales Police made a series of arrests of current and former teachers of Knox, 'including Nisbett, Treloar and Barrie Stewart': PJ[170], [431]. There were media reports of court appearances by Mr Treloar and Mr Stewart and those handling claims for UCPT provided copies to Allianz together with information about the arrest of Mr Nisbett and claims by former students including a claim by TPC2 of sexual assault by Mr Nisbett: PJ[432]-[441]. 3. By two letters dated 30 and 31 March 2009, 'bulk notifications' of claims were given to Allianz: PJ[177]-[178], [444]-[448]. 4. On 1 April 2009, the New South Wales Police served a search warrant on Knox for its files relating to numerous former students and former teachers, including a Mr James. The warrant also sought production of the files of other former Knox teachers: PJ[467]. 5. In April 2009 two further teachers at Knox, Mr Damien Vance and Mr Roger James were arrested: PJ[180], [466], [468]. 6. A claim by TPC3 was notified to Allianz by those handling claims for UCPT: PJ[471]-[474]. 7. There were communications about these developments by UCPT to Allianz. They culminated in a third 'bulk notification' on 31 March 2010: PJ[468]-[490]. 8. There were further notifications in the policy year ending 31 March 2011: PJ[501]-[528], [533]. Key findings by primary judge as to notifications 1. The primary judge made the following key findings concerning whether there were notifications by UCPT which met the requirements of s 40(3) of the Insurance Contracts Act and when those notifications were given: 2. In 1999, there was a notification of facts which might give rise to a claim by PTPC1 and it was unnecessary (given other findings) to determine whether it also operated as a notification of the possibility of claims by others: PJ[357]. 3. The 2003 Memo and the 2004 Memo sent to Allianz in December 2003 and January 2004 notified facts which might give rise to a claim by TPC1 concerning conduct of Mr Nisbett in the latter part of the 2002 school year of which notification was given during the period of the policy for the year to 31 March 2004 and which corresponded with TPC1's claim as it emerged: PJ[377]-[387]. 4. By December 2006, TPC1's compliant had 'morphed into an allegation of sexual assault' by Mr Nisbett and gave the matters in LKA1 and LKA2 'a different hue', which viewed objectively 'gave rise to the possibility, for the first time, of possible additional historical claims against Nisbett' (that is claims by other former students) which claims were notified during the period of the policy for the year to 31 March 2007: PJ[389]‑[407]. 5. With the exception of the complaint by TPC1, the matters in LKA2 'broadly described historical rumours which had laid dormant for over 20 years' and they did not 'admit of more than a bare possibility of a claim because of the absence of a contemporaneous complaint': PJ[460]. Further, the matters in LKA2 did not mean that it was reasonably practicable to notify of a 'problem' beyond the claims notified in 2004 and 2006 concerning Mr Nisbett: PJ[459]. 6. As to the position by the end of the policy for the year to 31 March 2007, the primary judge made the following finding (at PJ[406]-[407]): What is clear is that by the end of the 2006-2007 policy year, a new claim of sexual assault had been made by TPC1; a solicitor acting for TPC1 had sent a demand for compensation; Ms Blacker/Gadens had been retained to investigate; and Ms Blacker had been provided with access to historical information and was beginning to assess the claim in the light of that information. Allianz had accepted that the claim arose out of facts notified in 2003-2004, and I accept that that claim generated a review of historical rumours concerning Nisbett which arose out of the Pearson and LKA investigations, which, in the light of the new claim of sexual assault by TPC1 against Nisbett, objectively gave rise to the possibility, for the first time, of possible additional historical claims against Nisbett. It follows that these matters were notified as soon as was reasonably practicable to Allianz, and constituted notifications within the meaning of s 40(3) of the Act. 1. It was only during the period of the policy for the year to 31 March 2009 that the historical complaints had become a 'problem' that might give rise to wider claims as to conduct by perpetrators other than Mr Nisbett: PJ[460]-[463]. 2. By the bulk notifications given on 30 and 31 March 2009, UCPT notified Allianz of that problem in respect of 'former students of [Knox] who suffered loss arising from sexual or physical assault by Treloar or Stewart' (having previously notified as to such claims concerning Mr Nisbett): PJ[464]. 3. The content of the bulk notifications considered in the context of what had gone before was sufficient to notify a 'problem' with the breadth contended for by UCPT but confined to those who had been expressly identified: PJ[449]-[458]. 4. In the policy year ended 31 March 2010, the 'problem' ceased to be 'largely confined to the three teachers (Nisbett, Treloar and Stewart)' because 'further teachers became the subject of criminal proceedings (Vance and James) while another alleged perpetrator, Barratt, became the subject of a claim by a former [Knox] student of alleged abuse': PJ[466]. 5. Further notifications, including a third bulk notification, were given of the wider 'problem': PJ[467]-[500]. 6. The primary judge further found (PJ[502]) as follows as to the policy to 31 March 2011: For completeness, if I am wrong about the efficacy of the first, second and third bulk notifications for the purposes of s 40(3), I am satisfied that UCPT gave notice to Allianz of facts which might give rise to a claim as soon as was reasonably practicable. 1. Further alternative findings were made as to subsequent notifications. These aspects of the reasoning of the primary judge do not assume any significance for the appeal which, as has been explained, focussed upon whether the primary judge should have found a failure to notify as soon as reasonably practicable based upon knowledge of the contents of LKA2 and, alternatively, the application of Exclusion 7c by reason of that knowledge. Issues for determination 1. With that rather lengthy introduction, it is now possible to state the issues that fall for determination in the appeal, namely: 2. Did LKA2 contain facts which might give rise to claims for the purposes of s 40(3) of the Insurance Contracts Act that were broader than the claim that had been made by TPC1 concerning the conduct of Mr Nisbett in the latter part of the 2002 school year (as found by the primary judge) and, if so, what was the extent of those claims? 3. Could awareness by Mr Weeks as headmaster of Knox (or by the school council) of facts not known to officers of UCPT (particularly the contents of LKA2) bear upon whether UCPT as insured could rely upon the benefit of s 40(3)? 4. If no to (2), did the primary judge err in failing to find, for the purposes of applying s 40(3), that UCPT was aware of the contents of LKA2? 5. Before the primary judge, was the case for Allianz pleaded and conducted in a way that foreclosed the case that it seeks to advance on appeal concerning the significance of the contents of LKA2? 6. Having regard to the answers to (1) to (4), should the primary judge have found that UCPT could not rely upon the benefit of s 40(3) to the extent of all or some (and if so, which) of the claims found to have been notified in policy years after 31 March 2004? 7. Does s 54 of the Insurance Contracts Act apply to a failure to comply with the requirement to notify as soon as reasonably practicable after the insured becomes aware of facts that might give rise to a claim? 8. Should the primary judge have found that LKA2 recorded a fact, circumstance or occurrence that may give rise to a claim for the purposes of Exclusion 7c? 9. If yes to (7): 1. is the operation of Exclusion 7c limited by the terms of s 33 of the Insurance Contracts Act to instances specified in s 28 on the basis that it specifies the extent of the insurer's right in respect of the duty of disclosure imposed by s 21(1)? 2. is Exclusion 7c void for inconsistency with the Insurance Contracts Act by operation of s 52? 10. If by reason of the answers to the above issues the primary judge was in error as to any of the findings as to notifications, do principles of estoppel, waiver or utmost good faith mean that Allianz cannot rely upon any failure to notify matters in LKA2? 11. If the primary judge was in error as to the finding that claims by current or former students arising from sexual misconduct by Mr Nisbett were notified as soon as reasonably practicable in the policy year ending 31 March 2008, should the primary judge have found that such claims were notified during the policy year ending 31 March 2007? 12. If there is coverage for UCPT for the 'problem' then save for individual claims for which Allianz raises no issue on the appeal, is that coverage only under the policy for the year ending 31 March 2009? 13. Principally, the issues concern the application of aspects of Australian insurance law concerning claims made policies of insurance that operate by reference to the state of knowledge and awareness on the part of an insured of facts that may give rise to claims. 14. As has been explained by Derrington J, UCPT was both an insured and also a form of nominal defendant for claims brought against other insureds. As we have indicated, most of the issues in the appeal concern the extent to which it is the knowledge of officers within what might be termed the central administration of the Church (on the one hand) or those who were responsible for the administration of Knox (on the other hand) that is relevant when considering the extent of the indemnity afforded by the Allianz policies for the claims made in respect of sexual abuse of students at Knox. 15. Another important aspect is the distinction between the extent of insurance coverage provided by the policies and the contractual obligation of the Church to notify claims promptly. Where, as here, the extent of the risk assumed by Allianz as the insurer is itself defined by reference to whether a claim was made against an insured questions arise as to the application of statutory provisions that are directed to ameliorating the consequences of a failure to notify. As has already been observed, it was a condition of the policies that upon the making of a claim against the Insured (that is the Uniting Church, defined in a manner that included UCPT and Knox, amongst many others), the Insured shall notify Allianz in writing 'as soon as practicable' after the claim is made. For the purposes of that condition in relation to notification, 'the Insured' was defined to mean 'the General Secretary of the Synod'. This aspect was said by UCPT to bear upon whether it was the knowledge of the Church (through the General Secretary and senior officers and employees conducting the affairs of the Synod - being the general oversight body for the Church in a particular place) which was relevant for the purposes of the relevant statutory provisions in the Insurance Contracts Act, especially s 40(3). 16. In order to address the issues in the appeal, it is necessary to begin by considering the terms of LKA2 as they would have been apparent to a reasonable reader in the position of Mr Weeks when he read and considered all of the materials comprising LKA2 in 2004 and then made his report to the school council. Significantly, Mr Weeks (then the new headmaster of Knox) had commissioned the further investigation by Mr Wilson after becoming aware of historical allegations relating to Mr Nisbett's conduct. The contents of LKA2 as apparent to a reasonable reader in the position of Mr Weeks 1. LKA2 is a disturbing document to read in its entirety and with due regard to the context in which it came to be prepared. It contains information from a number of sources. Viewed as whole there is apparent consistency as to the nature of the allegations that LKA2 records. Those allegations are not confined to the conduct of Mr Nisbett. As has been explained by Derrington J, the report provided as part of LKA2 focusses upon the conduct of Mr Nisbett. That focus reflects the nature of the engagement of Mr Wilson. However, the same cannot be said of the supporting materials which record matters raised during the investigations undertaken by Mr Wilson. As has also been explained by Derrington J, those materials recorded a number of sources of information about sexualised conduct by a number of staff members towards students at the school. The fact that they were revealed by an investigation that was concerned with historical allegations of improper conduct by Mr Nisbett is itself significant. That is to say, even though Mr Nisbett was the focus of the investigation, inquiries produced responses concerning inappropriate behaviour by a number of staff members. 2. Further, it is apparent that Mr Wilson considered that he needed to tread carefully when undertaking the investigation to ensure that he did not bring forth claims or reports of conduct in a way that would be contrary to the interests of Knox. That is to say, the investigation that was conducted was subject to strictures born of concerns that the act of undertaking the investigation might itself cause those who were interviewed (and who had raised matters of real concern) to be a catalyst for the allegations being publicised. Therefore, it was not, in any sense, a complete investigation of the matters that came to light about the conduct of other staff members in the course of investigating allegations of past behaviour of Mr Nisbett. 3. The relevant aspects of the report's contents for present purposes are set out in the reasons of Derrington J. Any reasonable reader, with responsibility for the affairs of Knox, would have concluded that there was a very real possibility that there had been past behaviour by a number of staff members of the school towards students that was sexual in nature. Further, that there had been rumours as well as reports to those in positions of responsibility at the time. That is to say, the matters recorded in LKA2 indicated that there was the prospect, though not the certainty, that those in charge at the relevant time were aware that inappropriate conduct towards students was occurring. Indeed, the information that had been obtained indicated that knowledge of certain conduct had been the reason why some staff members had left the school. It also indicated that a report prepared at the time had expressed concerns that serious inappropriate behaviour was being engaged in by a number of staff members who were in contact with boarding students. Further, the nature of the information was such that it suggested that the conduct was not isolated and had been ongoing for some time. 4. As to Mr Nisbett, the supplementary risk assessment report by Mr Wilson noted that the similarity between allegations from the 1980s and 1990s on the one hand and the allegations relating to 2002 (the subject of LKA1) were 'striking' and were matters that were cause for concern. As to the conduct of others, Mr Wilson included the following significant statement (despite his risk assessment report being confined to the conduct of Mr Nisbett): I draw to your attention the evidence contained in interview transcripts relating to the highly questionable conduct of a small number of staff who appear to have left Knox overnight due to concerns about their behaviour. No risks have been assessed in relation to these people as they are no longer employees, however due to the concern expressed over missing records in relation to the current investigation, it is recommended that you take steps to adequately secure all records relating to this investigation, the previous investigation and matters relating to alleged improper conduct of any other employee. 1. To any reasonable reader with the responsibility of being the headmaster of the school, the above statement was a red flag. Mr Wilson, an experienced expert in investigating allegations of child sexual abuse, considered it sufficiently significant in the context of a report about Mr Nisbett, to nevertheless draw the attention of the reader to the 'highly questionable conduct' of other staff at Knox who had left the school after concerns about their behaviour. 2. Further, the report warned in clear terms of the prospect of further claims relating to 'a pattern of alleged and some sustained behaviour from the 1980s and early 1990s' if there was any breach of confidentiality in relation to the current investigation. 3. The fact that the risk assessment was focussed upon providing recommendations as to what should be done in relation to the current circumstances at the school explains the focus upon the conduct of Mr Nisbett (who was still on staff at Knox at the time). However, it does not mean that the further matters about past conduct that were drawn to the attention of Mr Weeks would not have been considered to disclose the real prospect of future claims arising from conduct in the 1980s and early 1990s by reason of the information obtained in the course of the investigation. 4. As the evidence shows, the contents of LKA2 came to the attention of Mr Weeks at a time when there were clear legislative responsibilities concerning the reporting of sexual abuse. The nature of grooming behaviours was explained in materials at the time that were in evidence before the primary judge (see below). Those matters informed the nature of behaviour that should be the subject of report, as well as the kind of information that may indicate the existence of such behaviour. 5. LKA2 itself was prepared pursuant to a protocol that had been prepared by the Association of Independent Schools in New South Wales as to the discharge of the statutory obligations that arise where allegations of sexual abuse of a student are raised. The protocol is a detailed document which provides important evidence of the context in which the report was prepared and contemporary understanding of the nature of the issues that may arise in conducting an investigation and the obligations under legislation. It referred to the need for a complete report of any investigation conducted by a school to be forwarded to the Ombudsman. 6. LKA2 also included a copy of a note published by the Ombudsman concerning allegations of child abuse. It included the following description of grooming: Grooming may be the first phase of sexual assault. The Royal Commission recognised that grooming plays a critical role in the majority of incidents of child sexual assault. Sexual assault occurs when a person in power or authority takes advantage of trust or respect to involve a child in sexual activity. It has been widely documented that the dynamics of sexual assault is often very different to other forms of abuse. Child sexual assault follows distinct phases, the first phase being when the offender engages and grooms the child. The grooming process itself is split into several distinct steps: 1. Building trust - spending special time with the child, giving gifts, showing special favours, allowing the child to over step rules etc. 2. Testing of boundaries - undressing in front of the child, allowing the child to sit on the lap, talking about sex, accidental touching of genitals etc. 3. Engaging in sexual activity - this activity generally increases in severity over time. The behaviours detailed above may not be indicative of grooming if occurring in isolation. If however there is a pattern of behaviour occurring, it needs to be considered whether that behaviour is part of a grooming process and therefore needs to be viewed within the context of child sexual assault. 1. The document is much more detailed in its explanation of the kinds of behaviours that should be viewed with suspicion and the extent of investigations that should be undertaken where allegations are made or concerns raised. 2. It may be expected that, at the time of the report, any person in a senior position of leadership within a school would be aware of information of this kind. It is information that allows for insight into particular types of behaviours where they are engaged in consistently as to what they are likely to indicate. Even in the absence of factual information or reporting about actual sexual assault, information that indicated grooming behaviour would be a matter of very serious concern. 3. In any event, the document was included in the materials forming part of LKA2 and it was conceded that the whole of those materials were read by Mr Weeks at the time that LKA2 was provided to him by Mr Wilson. That concession was properly made. Having regard to the fact that Mr Weeks commissioned the report immediately upon becoming aware of the further allegations, the seriousness of those allegations and the undisputed fact that LKA2 was provided to the Ombudsman in accordance with statutory obligations, in all likelihood the whole of the report was read and carefully considered by Mr Weeks. 4. Accordingly, at the time LKA2 was provided by Mr Wilson, institutional responsibilities for ensuring child safety and protections from sexual abuse were recognised and well understood. Also, there was an understanding of the significance of grooming behaviours, their purpose and the fact that they may indicate that even more serious behaviour is occurring in clandestine circumstances. These matters were clearly set out in LKA2. 5. Whatever attitudes may have been at the time of the historical events the subject of LKA2, a reasonable reader of LKA2 in 2004 who was responsible for the ongoing care of students in a school must have understood both the insidious nature of the patterns of behaviour of those who engage in predatory and grooming activities towards children and the fact that the matters raised were indicative that behaviour of that kind had been engaged in by a number of staff members at the school. They must also have understood that many victims of sexual abuse do not disclose the behaviour until many years later and that this is a consequence of their vulnerability at the time and all that is involved for any person in finding the emotional strength to raise those allegations. Indeed, the fact that Mr Weeks took the steps to engage Mr Wilson to undertake the investigations that he did and to report in such a detailed manner shows that those matters were well understood. 6. Accordingly, the fact that LKA2 was prepared many years after the period of time addressed by the report and the fact that there had been no formal claims made of sexual abuse by those who were students at the school at the time were not reasons to discount the prospect that there had been serious misconduct by staff or the prospect that there would be claims in the future. Issue (1): Did LKA2 contain facts which might give rise to claims for the purposes of s 40(3) of the Insurance Contracts Act that were broader than the claim that had been made by TPC1 concerning the conduct of Mr Nisbett in the latter part of the 2002 school year (as found by the primary judge) and, if so, what was the extent of those claims? 1. Section 40(3) applies wherever a contract of liability insurance excludes or limits the extent of the insurer's liability because notice of a claim has not been given during the policy period: see s 40(1). It operates to extend the agreed insurance cover to include instances where notice was given after the end of the policy period 'of facts that might give rise to a claim' provided that was done 'as soon as was reasonably practicable after the insured became aware of those facts'. 2. In the present case, an issue arises as to whether the matters disclosed by LKA2 mean that an insured who was aware of those matters was 'aware of … facts' that might give rise to claims beyond those made by TPC1 concerning the conduct of Mr Nisbett in the latter part of the 2002 school year. 3. As has been mentioned, the primary judge found that LKA2 gave rise to a 'bare possibility' of the making of a claim which was insufficient to be a 'fact' for the purposes of s 40(3). Respectfully, for the following reasons, we do not agree. 4. As we have explained, LKA2 was prepared by an expert with considerable experience. In the view of its author, Mr Wilson, there was evidence in the transcripts of interviews that he had undertaken of 'highly questionable' conduct that had been engaged in by staff other than Mr Nisbett in the 1980s and 1990s. He also pointed out the striking resemblance between the allegations against Mr Nisbett in 2002 and the matters raised concerning Mr Nisbett's conduct in the 1980s and 1990s. 5. Derrington J has referred to the relevant authorities. As his Honour's analysis exposes, whether and when the insured had the relevant awareness of facts that might give rise to a claim is to be determined objectively. The requisite state of knowledge can arise from awareness of matters which indicate a problem that may give rise to a liability of the kind that is covered by the policy. Further, it is not necessary for the insured to be able to identify the precise cause of action or even be aware of the likely occurrence of all the facts or events which would be the basis for a claim. 6. Also, it is not necessary for the insured to be aware of the full extent of possible claimants or to identify each of them. It is enough if there is awareness of a problem which is of a character that is likely to give rise to claims of a kind that are covered by the policy. 7. We agree with the primary judge that care must be exercised in resort to metaphors such as 'hornet's nest' to describe the nature and extent of cases in which there is awareness of a problem without an ability to circumscribe its full extent. However, in point of principle, we accept that it is established by the authorities that the required statutory awareness of facts that may give rise to a claim does not require precise delineation of the nature of the claim nor the identity of the claimants. On the other hand, a bare belief or suspicion unfounded in any factual information could not amount to an instance where the insurer was aware of facts that may give rise to a claim for the purposes of s 40(3). The required awareness is of facts that expose the possibility of a claim, not an unfounded suspicion or belief or what amounts, in effect, to conjecture. 8. As to awareness of relevant facts that is said to arise through the provision of an expert assessment, the primary judge said (at PJ[243]): … While the opinion of a professional investigator may carry with it a notification of facts which might give rise to a claim, it is not the opinion itself that is capable of constituting a 'fact' within the meaning of s 40(3). An opinion may form the firmament above a substratum of facts which support the process of reasoning that led to its adoption, but, at the end of the day, one must have regard to the terms of s 40(3) which concern the notification of facts which might give rise to a claim. (original emphasis) 1. With respect to the primary judge, this approach is too broad. There will likely be instances where an understanding of what the known facts indicate in terms of potential liability is a matter that depends upon expert assessment. If that expert assessment is to hand it may expose the significance of factual matters not apparent to the untutored eye and, consequently, may expose to an insured that those facts might give rise to a claim against the insured. There will likely be other instances where experience and familiarity with other claims enables an expert to form views as to whether known facts indicate the basis for liability. For example, a person experienced in investigating fraud claims may be able to form a view as to whether certain types of activities are likely to indicate fraud based upon facts that may not enable an inexperienced person to form the same view. 2. These aspects were considered by Jackman J in MS Amlin Corporate Member Limited v LU Simon Builders Pty Ltd [2023] FCA 581 at [50] where his Honour expressed the view that the reasoning of the primary judge was not consistent with that of Meagher JA (Bathurst CJ and Bell P agreeing) in P & S Kauter Investments Pty Ltd v Arch Underwriting at Lloyds Ltd [2021] NSWCA 136; (2021) 105 NSWLR 110. We agree with Derrington J that the reasoning of Jackman J is to be preferred. 3. The submissions for UCPT sought to characterise LKA2 as lacking 'facts which might give rise to a claim'. UCPT described the transcripts of interview and other matters that were discovered by the investigation as being unreliable rumours and reports of hearsay accounts. These were said to lack the character of facts in the required sense. Reliance was placed upon views expressed by Meagher JA (Bathurst CJ and Bell P agreeing) in P & S Kauter Investments, a summary of which has been provided by Derrington J in terms with which we respectfully agree. In P & S Kauter Investments at [33], the view was expressed that: The requirement that the notification be of 'facts' indicates that s 40(3) is concerned with the notification of objective matters that bear on the possibility of a claim being made, rather than matters of belief or opinion as to that possibility. 1. Later at [43], in finding that s 40(3) did not apply to a notification, Meagher JA said: 'The notification does not include any fact which makes a loss more than a potential possibility'. UCPT contended that the same may be said of the contents of LKA2 such that if its contents had been notified they would disclose no more than the potential possibility of a claim. 2. The submissions for UCPT tended to view s 40(3) as requiring an awareness of facts which is the consequence of being provided with evidence that could be led to establish a cause of action. In our view, that approach was too narrow. It may be accepted that subjective beliefs or concerns as to possibilities without the requisite foundation to support an objective conclusion that there might be a claim would not amount to 'facts that might give rise to a claim'. However, that does not mean that there needs to be direct evidence of the events upon which a claim would be based in order for the statutory terms to be met. Where, as here, the nature of the claim is such that the claimant is likely to be the source of that evidence, the awareness of facts that point to the realistic prospect that such claimants exist and may bring forth claims would meet the statutory terms. As has been explained, those facts might include expert opinions as to what might be concluded from what is known. 3. Finally, we do not accept that the statutory language of 'might give rise to a claim' is concerned with whether facts might not give rise to a claim because they may remain concealed or confidential in some way. A construction of that kind would mean that an insured is not entitled to the statutory extension if the facts of which the insured was aware were not facts known to claimants. Having regard to the joint reasons of Toohey, Gaudron and Gummow JJ in Newcastle City Council v GIO General Ltd the interpretation of s 40(3) should be approached on the basis that it is to make mandatory cover arising out of an occurrence notified to the insurer during the policy period. We see no reason, consistent with that approach, to limit the scope of the statutory language in a manner that would deprive the insured of the statutory extension on the basis that matters that might give rise to a claim are not yet known to the claimant. 4. Returning to the circumstances at hand, in our view a reasonable insured who became aware of the fact that the investigations undertaken by Mr Wilson had produced the reports and statements set out in LKA2 as well as the opinions of Mr Wilson as to the significance of what those matters indicated when it came to the likelihood of historical sexual abuse of students at Knox would conclude that there was a problem that related to a number of staff members and, consequently, numerous students. Therefore, upon receiving that report a reasonable insured would become aware of facts that might give rise to all of the claims which subsequently emerged and in respect of which there were bulk 'problem' notifications a number of years later. 5. In addition to submissions to the effect that LKA2 did not contain 'facts' concerning any person other than Mr Nisbett, UCPT also sought to support the approach of the primary judge which viewed the information in LKA2 as taking on a different hue or character as subsequent events unfolded, particularly arrests of a number of former staff members of Knox and the identification of many prospective claimants through the manner in which the police investigation was conducted. As has been explained, the primary judge undertook that analysis on the foundation of a finding to the effect that LKA2 itself (when considered with subsequent information) revealed facts that might give rise to a limited form of claim against Mr Nisbett and no more. On the reasoning of the primary judge, it was only in the light of subsequent events that facts which might give rise to a claim came to be revealed. Given the conclusions that we have reached concerning the nature and extent of the facts that might give rise to a claim that were revealed by LKA2, respectfully, the approach of the primary judge cannot be sustained. 6. For those reasons, the fact that the information recorded in LKA2 had been obtained through the investigations conducted by Mr Wilson, the fact of the circumstances in which those investigations had been conducted and the opinion of Mr Wilson as to the significance of those facts when it came to indicating the prospect of historical behaviour by staff members giving rise to liability of a kind covered by the policy were to be considered when forming a view as to whether there was awareness of 'facts that might give rise to a claim against the insured' for the purposes of s 40(3). 7. In reaching the above conclusion, we have had regard to aspects of LKA2 emphasised by UCPT which focussed upon parts of the transcript of the interview of TPC2 in describing his relationship with Mr Nisbett as being that of a friend. However, that was not the correct approach. What was required was regard to the whole of the terms of LKA2 and the expert views of Mr Wilson. 8. The terms of what was indicated by the information in LKA2 was also contrasted with the much more detailed aspects that came to light a few years later. It was said that LKA2 should not be approached with hindsight bias as to what was known subsequently. However, that too tended to distract from the required inquiry. Of course, there was a point when there was more and more information that came to hand as more voices were added. That did not mean there was insufficient information earlier to amount to the requisite awareness for the purposes of the statutory extension. 9. Finally, it is to be noted that there is a tension in the way in which UCPT advanced many of its submissions. To the forefront were submissions to the effect that there was an unfairness in an approach which allowed Allianz to deny liability even though for a number of years it had allowed claims and had renewed policies once the extent of the problem was known. However, with due respect, those submissions suffered from a number of flaws. 10. First, the extent of the statutory extension depends upon the scope of the phrase 'facts that may give rise to a claim against the insured'. The narrower the scope of those words, the narrower the extent of the statutory extension. It may be expected that when it comes to successive policies, insurers will require disclosure of facts that may give rise to a claim. Further, they may be expected to decline or limit successive cover on the basis of such disclosure. In consequence, coverage would not extend to those claims when made. Given the reasoning in Newcastle City Council v GIO General Ltd to the effect that s 40(3) remedied a mischief by requiring policies to cover claims made outside the period of cover provided they arose out of occurrences notified within the period of cover and the fact that the word 'might' was used, the statutory language should not be given a restrictive interpretation. To do so would work an unfairness to insureds of the very kind that the provision was intended to ameliorate. In that regard, the test set by the statutory provision is 'deliberately undemanding' (as is explained by Derrington J, reasoning from like provisions that operate contractually). 11. Second, by reason of the manner in which notifications were given, Allianz was entitled to approach its dealings with UCPT on the basis that awareness of the problem at Knox had emerged over time and that the state of awareness of the problem in each policy year coincided with the nature and extent of the notifications. The notifications invited the kind of analysis undertaken by the primary judge as to whether the statutory extension applied to the claims notified in each policy year. If, as has been concluded, that impression was not accurate, then it is not appropriate to point to what was done by Allianz when it did not know the position. An insurer is not bound to afford indemnity that is not offered by the policy. So far as the cover for the claims under the statutory extension is concerned, if notification had been given in accordance with s 40(3) then all claims would have been brought within the policy for the year of notification. There is a limit to statutory extension. There is unfairness to the insurer if, in effect, the statutory extension is expanded on the basis of actions taken by the insured when the insurer was not aware of that position. 12. Third, although the primary judge found that knowledge on the part of Ms Blacker in 2007 of the terms of LKA2 was a notification of its terms to Allianz, it does not follow that there was actual knowledge of those terms on the part of those within Allianz charged with determining whether to offer further insurance cover to the Uniting Church and hence to UCPT. It was the position of Allianz that its actual awareness of the content and nature of LKA2 did not arise until well after the last period of insurance had come to an end. 13. For UCPT it was submitted that Allianz knew at least of the existence of LKA2 before then because there was reference in communications with Allianz to materials that were in the possession of Knox. It was further submitted that notwithstanding this knowledge Allianz was disinterested in obtaining a copy and undertook reinsurance without seeking a copy of LKA2. However, that misses the point. What Allianz was not aware of was the nature of the contents of LKA2 which was presented to it as being a report about Mr Nisbett. As has been explained, that was not the extent of the significance of the matters in the report. Allianz was entitled to proceed on the basis that its insured had notified the extent of the claims that might be made. It could take those matters at face value and could hardly be said to be obliged to undertake its own check of what its insured was telling it about the extent of the facts of which it was aware about those claims. Issue (2): Could awareness by Mr Weeks as headmaster of Knox (or the school council) of facts not known to officers of UCPT (particularly the contents of LKA2) bear upon whether UCPT as insured could rely upon the benefit of s 40(3)? 1. In the appeal, both UCPT and Allianz approached the issues on the basis that it was UCPT that was the insured claiming to be entitled to coverage under the policy. Significantly, Allianz did not question whether UCPT was itself an insured in respect of liabilities that arose from the conduct of staff at Knox. As to awareness for the purposes of s 40(3), Allianz contended that UCPT was aware of LKA2 'through' Mr Weeks as headmaster of Knox or the school council. Allianz advanced its appeal on the basis that the alleged error by the primary judge was in not finding that awareness of the headmaster and council members of Knox was to be treated as awareness of UCPT for the purposes of the indemnity sought by UCPT under the policies. The contentions advanced by Allianz 1. In support of its contention that UCPT was aware of facts for the purposes of s 40(3) by reason of what was known by the headmaster and school council of Knox, Allianz sought to characterise Knox as a professional business of UCPT. It relied upon UCPT being the owner of the business name Knox Grammar School and the holder of the ABN for the activities of Knox. It contended that Knox was owned and operated by UCPT. It claimed that Mr Weeks, and not anyone from UCPT, was the person responsible for running Knox and was the guiding mind and will for the purpose of that aspect of the activities of UCPT. It also submitted that relevant legal principles of attribution did not require the use of an analysis that involved identifying the guiding mind and will of UCPT and it was open to formulate a rule that was appropriate for the purposes of s 40(3). 2. Allianz also relied upon the terms of the concise statement filed by UCPT setting out the basis for its claim against Allianz. It began: The Applicant, Uniting Church in Australia Property Trust (NSW) (UCPT), is the Insured under various 'Professional Indemnity' policies of insurance underwritten by the Respondent, Allianz Australia Insurance Limited (earlier known as MMI Insurance Limited) (Allianz), continuously between 31 March 1999 and 31 March 2011 (the Policies). Capitalised terms in this Concise Statement are as defined in the Policies, unless stated otherwise. The Policies covered various professional businesses of UCPT including Knox Grammar School (KGS) which is a school for male students from Kindergarten to Year 12 with both day students and boarders. 1. Relying on the above characterisation by UCPT of its relationship to Knox, Allianz claimed that the primary judge ought to have found that UCPT's claim was made on the basis that it conducted the business of Knox. It submitted that UCPT's concise statement reflected the scheme of the legislation that provided for the establishment of the Uniting Church in New South Wales. It was said that the legislation contemplated that all property of the Uniting Church would be held by UCPT as a legal corporation established by the legislation. Therefore, UCPT was the owner and operator of the school. On that basis it was said that it was UCPT that conducted Knox. 2. It is well to note that the concise statement went on to say: During the combined periods of insurance cover of the Policies from 31 March 1999 and 31 March 2011 (the Period of Insurance Cover), UCPT gave various notices in writing to Allianz of circumstances that might give rise to a claim. The notified circumstances concerned claims that might arise from sexual abuse/physical assault involving students and the teachers and staff of KGS. A number of sexual abuse/physical assault claims have been, and continue to be, made against UCPT as a result of alleged sexual abuse/physical assault to former students of KGS. UCPT has claimed under the Policies and Allianz has declined to indemnify UCPT for various KGS sexual abuse/physical assault claims. UCPT's suit arises out of these declinatures. 1. It refers to the claims the subject of the proceedings as claims made 'against UCPT'. 2. Allianz also pointed to correspondence from Ms Blacker. Certainly, communication with Ms Blacker at that time was from Mr Oldmeadow who used the title 'Executive Director, Board of Education, Uniting Church in Australia, NSW Synod'. For example, on 4 April 2007, Mr Oldmeadow sent an email to Ms Blacker in which he said, amongst other things: The Headmaster, Mr John Weeks, has informed me that there have been further developments in this matter and that it may be appropriate for him to share these with you. Further, there is a significant deposit of information and documentation held at Knox Grammar School. John Weeks believes that it may be most appropriate for you to visit the school and examine the material onsite. John is only too willing to meet with you and provide access to and his input on this material. As John has been the key person coordinating the various investigations and the person to whom [the claimant and his father] have been communicating, I believe it would be appropriate for you to meet with John. 1. The contents of the email indicate that Mr Oldmeadow had the carriage of matters in relation to the claim at that time. 2. In correspondence, Ms Blacker referred to the Insured as UCPT trading as Knox Grammar School, though also continued to refer to the Board of Education of the Uniting Church as operating the school. 3. Allianz emphasised that it was the liability of Knox (not UCPT) that was settled under the claims for which payments had been made by UCPT. The contentions advanced by UCPT 1. For UCPT, emphasis was placed upon the fact that the party seeking to enforce the terms of the policies was UCPT. It was said to be 'the Insured' for the purposes of the proceedings. In consequence, so it was submitted, it was the application of s 40(3) to UCPT that mattered. UCPT contended that it was the awareness of the officers of UCPT that was relevant for the purposes of s 40(3). It claimed that UCPT's officers were not aware of LKA2 until much later when the notifications did occur. 2. Further, UCPT claimed that when it came to whether knowledge of those who were not officers or employees of UCPT (particularly Knox, but possibly also those in the Synod) could be attributed to UCPT, it was necessary to have regard to the way in which dealings had occurred with Allianz in providing information for the purposes of consideration by the insurer as to whether to extend cover in each policy year. It was said that those dealings were with the General Secretary of the Synod who was said to be 'the fulcrum for the knowledge [of the Insured] or for the notification functions under the arrangements between the parties'. That is to say, the way in which the parties had conducted themselves was said to be relevant to the way in which the statutory provision operated when it came to attribution of knowledge. 3. UCPT relied upon the provision of quotation slips each year by Marsh as broker for the Uniting Church in Australia. In 1999, when the ongoing arrangements with Allianz had commenced Marsh included in the quotation slip the following: Prior to renewal date each insured Synod will provide 'No Claims' declarations from various institutions within their control. For the purpose of notification of professional indemnity claims, 'the Insured' is taken to mean 'the General Secretary of the Synod'. 1. A description of the history and structure of the Uniting Church was also included as part of the quotation slip. It described the structure in the terms described below. It referred to the activities of the Church as being divided into four divisions: Administration, Church & Ministry Activities, Community Services and Educational Services. Within the Administration division there were said to be, amongst other things, employed staff who handle Church insurance programmes. Within the Educational Services division reference was made to 44 schools Australia wide that were operated by the Church. Knox was included in the schedule of schools. 2. It is significant that the quotation slip indicated that the 'No Claims' declarations were required from the various institutions within the control of the Church that were to be provided by each Synod. The notifier was to be the Synod, but the notification was to be of declarations from the 'institutions'. Accordingly, the arrangements described in the quotation slip were for the awareness of the institutions to be communicated to the insurer by the General Secretary of the Synod. Further, the schools were identified as being 'operated' by the Church. 3. On the evidence, an updated form of the quotation slip was provided each year to Allianz through Marsh as the broker for the Uniting Church. There was included in those quotation slips a copy of reporting guidelines for alleged sexual harassment or sexual abuse. It included the following: Failure to notify the insurer prior to expiry of these 'claims made' policies (31 March), may result in no cover being available. In an organisation such as the Uniting Church in Australia, it will be a question of fact as to whether such information known to an individual within the Church is in fact information of which 'the insured' is aware. In any set of circumstances, these disclosure duties may not be tested until a matter is before the court. It is therefore imperative that any allegation, or the discovery of any circumstance which indicates the possibility of a claim arising, be immediately reported to the General Secretary of Synod for notification to the insurer. It is most important that any circumstances which are known within the Church or its agencies be passed on immediately. At no stage should any person or group of persons within the Church or its agencies prevent or withhold the passing on of the relevant facts to the General Secretary of Synod. Failure to disclose such information will seriously prejudice any potential to recover compensation under the Church's Liability Insurance programme. (original emphasis) 1. The above document appears to have been prepared and provided to Allianz as part of the quotation slip each year. It also indicates that the expectation as between the parties was that the notification to be given by the General Secretary was not to be informed by what the Synod and its officers knew but was to extend to communicating matters of which the agencies were aware. Hence the importance of ensuring that the agencies communicated facts of which they were aware to the General Secretary so that they could be notified and ensure coverage. 2. The primary judge's finding that the above guidelines were not withdrawn or replaced during the relevant period (PJ[613]) is not challenged. 3. Despite these provisions, UCPT submitted that if Knox knew something and it was not passed on to the General Secretary of the Synod then it was not knowledge for the purposes of the notification arrangements referred to in the quotation slips. 4. What is clear from these submissions is that UCPT accepted the significance of the arrangements referred to in the quotation slips when it came to understanding the provision in the policies that referred to the General Secretary of the Synod for the purposes of the notification provision in the policies. UCPT's role as a nominal defendant 1. The reasoning of Derrington J exposes the unusual nature of the liability in respect of which indemnity is sought by UCPT in the present case. As his Honour explains, UCPT's relevant liability arises from its status as a form of nominal defendant offered up by the Uniting Church as a legal entity against whom any person with a claim against the Uniting Church in New South Wales or its agencies may bring proceedings. By reason of that status, claims may be brought against UCPT that are not founded on any legal liability on its part but rather depend upon demonstrating legal liability on the part of the Uniting Church or its agencies. 2. We agree with Derrington J that the case as advanced and articulated for UCPT did not identify any basis for a claim in respect of which it sought indemnity beyond pointing to the provisions in the regulations adopted by the Church. As has been explained, UCPT is constituted as a corporation by the Uniting Church in Australia Act. Its powers and duties do not include responsibility for administering the activities of the Uniting Church: see s 13. Nor was it suggested in the appeal that UCPT has some statutorily imposed or other obligation to indemnify parties seeking to make claims against the Uniting Church or its agencies. Hence its characterisation by the primary judge as a form of nominal defendant against whom proceedings can be brought where the matter in issue is whether there is liability on the part of the relevant Uniting Church agency (or its officers or employees) to the claimant. 3. As is also explained by Derrington J, the Uniting Church is empowered to adopt a constitution: s 12. It has done so. The constitution of the Church allows for the making of regulations. The regulations include a provision to the effect that the 'Property Trust' in the State or Territory where proceedings are being taken may sue or be sued in its name 'on behalf of the Church or any agency of the Church'. It may be accepted that UCPT is such a 'Property Trust'. We agree with Derrington J that a regulation of that kind does not mean that UCPT itself has an independent legal liability for the actions of the agencies of the Uniting Church. The fact that the Uniting Church is willing to allow those who claim to have causes of action against the Church's agencies to nominate UCPT as the defendant (and for UCPT to meet any liabilities that are accepted or established by court proceedings against UCPT) does not relieve the claimant of the burden of having to demonstrate liability on the part of the agency. Indeed, in any proceedings brought against UCPT in reliance upon the terms of the regulation, the claimant would need to demonstrate liability on the part of the relevant agency and that cannot be done by bringing a case against UCPT without alleging a legal cause of action against the relevant agency. 4. It remains necessary to form a concluded view as to the status by which UCPT brought the present proceedings. Did it bring them as (a) an insured in respect of its own liability to the claimants; (b) an insured in respect of liability that arose because it carried on the business of Knox; or (c) a form of nominal defendant under the terms of the regulations for the Uniting Church by which it acceded to claims of liability on the part of Knox as an agency of the Uniting Church? These three alternative possibilities are considered below. The capacity in which UCPT advanced the proceedings 1. For reasons that have been given, the nature of the claims the subject of the proceedings was such that UCPT had no direct liability. Therefore, UCPT did not bring the proceedings against Allianz on the basis that it was itself an insured in respect of its own liability to the claimants. Alternative (a) may be put to one side. 2. As to alternatives (b) and (c), it was not disputed that UCPT was the owner of the business name Knox Grammar School throughout the relevant period. There was an unchallenged finding by the primary judge to that effect as well as a finding that UCPT held an ABN in the name of UCPT trading as Knox: PJ[47]. However, that was not the full extent of the evidence as to the way in which the affairs of Knox were conducted. 3. The structure for the affairs of the Uniting Church provided for by the Uniting Church in Australia Act was that it conferred legal authority, at least in New South Wales, for the Congregational Church, Methodist Church and Presbyterian Church to unite in accordance with a document described as the 'Basis of Union'. 4. A church is not itself a legal entity. A Christian church is an assembly of people, an ekklesia who share common beliefs in God and adopt practices as a community informed by their particular theological understanding as to the expression of their faith. The Basis of Union deals with such matters and provides for a constitutional structure with various aspects (see Schedule 2 to the Uniting Church in Australia Act). It comprises the Congregation, the Elders, the Presbytery, the Synod and the Assembly. Each of these groups has particular responsibilities described in the Basis of Union. They are not legal entities. 5. The Assembly is a national council. Its members are appointed by the Presbyteries and Synods. It has ultimate responsibility for 'matters of doctrine, worship, government and discipline, including the promotion of the Church's mission, the establishment of standards of theological training and reception of ministers from other communions, and the taking of further measures towards the wider union of the Church'. The Synods are regional councils. They have 'responsibility for the general oversight, direction and administration of the Church's worship, witness and service in the region allotted to it, with such powers and authorities as may from time to time be determined by the Assembly'. As to these matters see article 15 of the Basis of Union and the constitution of the Uniting Church. 6. Separately, as explained, the legislation establishing the Uniting Church in New South Wales provides for UCPT to be constituted. It is to consist of three identified officer holders of the Synod (in New South Wales) and five other persons appointed by the Synod: s 12. Section 13 provides that UCPT may: (a) acquire, hold, deal with and dispose of property of any kind, (b) mortgage, charge or otherwise encumber any of its property, or (c) borrow money for the purposes of the Trust. 1. The property in New South Wales of the churches who united under the Basis of Union is vested in UCPT: s 20. It is also to be the holder of all further property in New South Wales acquired by the Uniting Church. In that regard, s 21(1) provides: (1) To the extent to which, by a deed, will or other instrument that takes effect on or after the appointed day, any property: (a) is devised, bequeathed, given, granted, released, conveyed or appointed to the Church or to a person (not being the Trust) for, or for the benefit of, or in trust, for the Church for the religious, social, educational or charitable work of the Church, or is declared or directed to be held by any person (not being the Trust) for, or for the benefit of, or in trust for, the Church or the religious, social, educational or charitable work of the Church, (b) is recoverable by the Church or by any person (not being the Trust) for the Church, or (c) is payable to, or receivable by, the Church or any person (not being the Trust) on behalf of the Church or for the religious, social, educational or charitable work of the Church, the deed, will or other instrument shall be read and construed and take effect as though the reference therein to the Church or, as the case may be, to that person, were a reference to the Trust. 1. Therefore, the activities and affairs of the Church are administered by the Synod, but owned by UCPT. In that respect, the use of the term trust in naming UCPT as the ownership body is apt. 2. It follows that it is correct in a property or ownership sense to refer to the business conducted by Knox as being a professional business of UCPT. The references in the concise statement of claim in the proceedings before the primary judge may be understood in that context. 3. However, Knox has its own constitution that regulates its governance. It is not separately incorporated, but has its own school council. The constitution provides that ultimate control of Knox is to vest in the Synod of the Church. That is to say, it is under the auspices of the Uniting Church not UCPT. The following findings by the primary judge (at PJ[46]) concerning the constitution of Knox were not in issue in the appeal: (1) all real and personal property of [Knox] was to be held and managed in accordance with the UCA Act, the Assembly Regulations and Synod by-laws (cl 4); (2) subject to the ultimate control of the Synod, the management of [Knox] would be carried out by a council of between twelve and fifteen persons, whose members were to be appointed by the Synod (cl 6(a)); (3) the council would meet at least quarterly (cl 12(a)); (4) the council would be empowered to appoint committees and to delegate powers to the committees in such a manner as it may determine (cl 21); and (5) the council may, from time to time, appoint, suspend or dismiss a principal (that is, the headmaster), who was to be responsible for the general administration and daily operation of [Knox] and for the implementation of decisions of the council (cl 11). 1. Therefore, constitutionally, UCPT had no direct responsibility for, or involvement in, the daily activities and operations of Knox. Further, to the extent that there was ultimate control over the affairs of Knox, that was entrusted to the Synod of the Uniting Church. 2. In those circumstances, we do not accept the submission for Allianz to the effect that UCPT conducted or supervised the activities of Knox or that in some way those activities were conducted by UCPT as a business activity of UCPT. Further, it was not suggested that the staff of Knox were employed or ultimately supervised in any way by UCPT. It cannot be inferred from the fact that UCPT was registered as the holder of the business name and ACN, that it conducted the educational activities of Knox. An equally open inference given the structure adopted for the affairs of the Uniting Church is that UCPT was the legal holder of those registrations on behalf of the members of the unincorporated association who lacked the legal status to maintain the registrations. 3. For those reasons, we agree with Derrington J that the legal basis for the liability of UCPT was as the nominal defendant for Knox as an agency of the Church. Accordingly, it is alternative (c) (as set out above) and not alternative (b) that applies. 4. The difficulty is that the parties did not conduct the appeal with due regard to these relevant distinctions. The case put by Allianz on appeal was that UCPT had knowledge of LKA2 because awareness on the part of the headmaster and the school council of Knox was to be treated as awareness of UCPT for the purposes of s 40(3). Alternatively, that it should be inferred that UCPT was aware of the contents of LKA2 by January 2006 (at the latest). Significantly, as has been mentioned, Allianz approached the case on the basis that the policy covered UCPT for liabilities of the kind that were in issue and that it was the awareness of UCPT as the insured that was relevant in determining whether the extension afforded by s 40(3) arose. 5. We see the force of the reasoning by Derrington J to the effect that the policy of insurance might be construed on the basis that the claims that may be made against UCPT as a nominal defendant are not claims that are covered by the policies. In those instances, UCPT handles a case in which Knox as an agency of the Uniting Church may have insurance coverage for the claim and it will be the awareness of that agency that matters for the purposes of s 40(3). 6. During oral submissions, the issue of the precise nature of the foundation for UCPT's claim was raised and addressed. However, as the appeal was conducted on the basis that UCPT was the Insured in respect of the claims of sexual abuse of students at Knox and it was the awareness of UCPT that mattered, in our view the case must be disposed of on the basis of the common approach of the parties. 7. Nevertheless, for reasons we have given, it cannot be the case that UCPT has any underlying legal liability of its own when it comes to the claims. Therefore, any claim that it makes under the policy is for an indemnity that arises by reason of its status as nominal defendant. That is to say, having regard to the policy terms and the nature of the structure of the Uniting Church and UCPT, the common position adopted by the parties must mean that they accept that UCPT is an insured for liabilities that it incurs as a nominal defendant. Therefore, in what follows, we approach the competing contentions of the parties as to whether UCPT was aware of LKA2 by January 2006 on that basis. The bulk notifications 1. After LKA2 became known, issues in relation to Mr Nisbett were communicated to the Synod office. Mr Piening of the Synod then communicated with the brokers for the Uniting Church, Marsh. This appears to have been by telephone, at least initially, because on 15 April 2004, Mr Dennis of Marsh sent an email to Mr Piening in the following terms: Further our phone conversation on 29/3/04, have you heard from Knox concerning the outcome of the meeting they proposed having with Mr Nisbett that week? If you have heard nothing further would you please follow-up with Knox to determine the current position. Await your response. 1. On 19 April 2004, Mr Dennis sent a further email to Mr Piening in which he said: I have discussed these type of reports further with my Finpro colleagues. They have commented that the changed conditions affecting the insurance market are also evident in respect of insurers attitude towards the reporting of circumstances that could give rise to a claim. In this regard, insurers have tightened their requirements in recent times and now require brief details and some form of identification (not necessarily names) before they will accept a report as a formal notification of circumstances which could give rise to a claim. I am advised that provision only of a reference number and an accompanying statement that it relates to an allegation of sexual misconduct involving a minister will not be accepted by insurers as a notification. I appreciate that this is a very sensitive matter for the Church and you may choose not to disclose the required information while preliminary investigations are underway. However, as you are aware, under a 'claims made' policy, if brief details of the matter are not notified to insurers during the period of insurance, there is always the possibility that the policy conditions may be breached by a claim arising after the renewal date (or perhaps after several renewals have passed). 1. Some communications by Marsh to Allianz in relation to Mr Nisbett which were relied upon as notifications in relation to claims concerning Mr Nisbett were headed 'Client: The Uniting Church in Australia - Knox Grammar School'. 2. Further email communications from Marsh to Allianz in March 2007 were given the reference 'Uniting Church/Knox Grammar School/[name of complainant]'. An email of 7 March 2007 said '[a]s this matter is escalating [the Uniting Church] would be pleased if you would involve Wendy Blacker from Gadens'. 3. We have already referred to the descriptions used by Ms Blacker to describe the Insured. 4. As has been mentioned, the bulk notifications dated 30 and 31 March 2009 were sent to Allianz. Each of the notifications commenced in the following terms: The Uniting Church in Australia Property Trust (NSW) currently holds a Professional Indemnity policy and Directors, an Officers policy with Allianz Australia Insurance Limited and an Employment Practices Policy. The period of insurance for these policies is from 31 March 2008 to 31 March 2009. The purpose of this letter is to notify circumstances that could give rise to claims under the above policies of insurance. Please accept the notification as falling within the above policy period. The Uniting Church in Australia Property Trust (NSW) and Knox Grammar School have become aware of circumstances that could give rise to claims under the nominated policies held by the Uniting Church in Australia Property Trust (NSW). The potential claims under the Professional Indemnity policy are likely to be claims relating to psychiatric injury and/or physical injury arising from physical assault, sexual assault, trespass to person, breach of fiduciary duty and negligence. (emphasis added, paragraph numbering omitted) 1. Therefore, the form in which earlier notifications were communicated was less formal than the bulk notifications. The early notifications referred to the Uniting Church. However, by the time of the bulk notifications, UCPT was identified as the insured. Nevertheless, it is significant that those notifications set out matters in respect of which UCPT and Knox were said to have become aware. Such an approach is consistent with the terms of the quotation slips. They give significance to what is known by Knox. Is the awareness of Knox to be attributed to UCPT? 1. In support of its appeal, Allianz placed reliance upon the reasoning in Commonwealth Bank of Australia v Kojic [2016] FCAFC 186; (2016) 249 FCR 421 at [96] (Edelman J, Allsop CJ agreeing) to the effect that when it comes to attribution of knowledge for the purposes of a statutory provision, the circumstances in which there will be attribution are to be determined as a matter of statutory construction, not on the basis of the 'directing mind and will' approach to attribution. 2. There is now a considerable body of case law in Australia embracing the contextual approach articulated by Lord Hoffmann in Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500 (as adopted in Kojic) emphasising the importance of context when it comes to formulating the relevant 'rule' of attribution to be applied: see, for example, Director General, Department of Education and Training v MT [2006] NSWCA 270; (2006) 67 NSWLR 237 at [17]‑[24] (Spigelman CJ, Ipp JA and Hunt AJA agreeing); R v Commercial Industrial Construction Group Pty Ltd [2006] VSCA 181; (2006) 14 VR 321 at [30]‑[32] (Maxwell P, Buchanan and Redlich JJA); Australian Securities and Investments Commission v Westpac Banking Corporation (No 2) [2018] FCA 751; (2018) 266 FCR 147 at [1659]‑[1662] (Beach J); GM Global Technology Operations LLC v S.S.S. Auto Parts Pty Ltd [2019] FCA 97 at [92] (Burley J); Australian Competition and Consumer Commission v BlueScope Steel Limited (No 5) [2022] FCA 1475 (O'Bryan J) at [172]; Anderson v Canaccord Genuity Financial Ltd [2023] NSWCA 294; (2023) 113 NSWLR 151 at [234]‑[237] (Gleeson, Leeming and White JJA); and Zurich Australian Insurance Limited v CIMIC Group Limited [2024] NSWCA 229 at [157] (White and Stern JJA, Griffiths AJA). 3. Accordingly, in a statutory context, it is necessary to have regard to the context and purpose of the statutory provision in reaching a conclusion as to the circumstances in which a statutory requirement for a particular state of knowledge of a party has been met. However, in a contractual context, there must be regard to the proper construction of the term which operates by reference to a particular state of knowledge. That is to say, for contractual purposes, the agreed terms will inform when the requisite state of knowledge exists (subject to application of common law principles not excluded, such as the law of agency). 4. The complexity here is that the statutory provision operates to effect a statutory extension of cover which is otherwise conferred by the agreed policy of insurance. The section applies in relation to 'a contract of liability insurance' of a particular kind: s 40(1). It adds to the contractually agreed cover. In all other respects the contractual arrangements between the parties as to the insurance apply (subject, of course, to the operation of other provisions in the Insurance Contracts Act). This is a matter to which we will return. 5. It should be noted that where knowledge is said to be attributed through an agent, it is necessary to have regard to the principles concerned with the extent of authority of an agent: see, for example, All Class Insurance Brokers Pty Ltd (in liquidation) v Chubb Insurance Australia Limited (No 2) [2021] FCA 782 at [158]-[179] (Allsop CJ); and Bilta (UK) Ltd (in liq) v Nazir [2016] AC 1 at [183]-[189]. However, no contention was advanced to the effect that Knox was the agent of UCPT. 6. When considering s 21 of the Insurance Contracts Act in Permanent Trustee Australia Limited v FAI General Insurance Company Limited (in liq) [2003] HCA 25; (2003) 214 CLR 514, McHugh, Kirby and Callinan JJ concluded that whether a person who made a statement in connection with a proposed contract of insurance knew that the statement would have been relevant to a decision by an insurer to accept the risk, was to be decided based upon what the person (in that case an insured) knew, not what an intermediary knew. Gummow and Hayne JJ reached a different conclusion: at [82]‑[88]; see also Fitzgerald, in the matter of Temp Holdings Pty Ltd (In Liq) v Tully [2024] FCA 391 at [263]-[264] (McElwaine J) citing Tosich v Tasman Investment Management Limited [2008] FCA 377 at [93(6)] (Gyles J). However, s 21 is concerned with representations. Section 40(3) has a different purpose. Whether the insured is aware of facts 'that might give rise to a claim' and notifies them as soon as reasonably practicable determines whether the statutory extension in cover is afforded. If there is no requisite awareness then an insured under a claims made or claims made and notified policy will still be able to seek cover under a successive policy. The construction of s 40(3) should be approached on the basis that the nature of this kind of insurance is such that insureds will usually obtain successive policies and will obtain 'run-off' cover when the activities that might give rise to the claims have ceased to be undertaken by the insured. Therefore, there are important differences between the nature of s 21 and s 40(3) such that a conclusion as to the proper approach to attribution for one will not indicate the proper approach to the other. As to s 21, see also Zurich Australian Insurance Limited v CIMIC Group Limited at [156]ff (White and Stern JJA, Griffiths AJA). For the reasons just given, we agree with Derrington J that the authorities concerning s 21 do not assist. The statutory question 1. Returning then to the terms of the statutory provision, it is concerned with a contract of liability insurance where 'notice of a claim against the insured' must be given before the expiration of the period of insurance in order for the insured to be covered: see s 40(1). The statutory extension arises where the insured gives notice in writing to the insurer of facts that might give rise to a claim against the insured as soon as the insured becomes aware of those facts. 2. The cover added by s 40(3) depends upon (a) there being facts that might give rise to a claim against the insured; (b) the insured being aware of those facts before the policy expired; (c) the insured giving notice in writing of those facts to the insured as soon as reasonably practicable; and (d) a claim of the kind notified being made at any time thereafter (including after the end of the period of cover). 3. Section 40(3) imposes no obligation upon an insured to give the notice. If the insured is aware of facts that might give rise to a claim but does not notify then the statutory extension is not enlivened but there is otherwise no consequence for the rights of the insured effected by s 40(3): Avant Insurance Ltd v Burnie [2021] NSWCA 272 at [33] (McCallum JA and Simpson AJA); see also [104] (Emmett AJA). Whether there are consequences for the insured when it comes to being able to obtain further cover for later periods will depend upon the disclosure obligations, the insurer's appetite for risk in light of such disclosure and the extent to which specific exclusions are included in the terms of any future insurance cover. At present, we are not concerned with such matters. Rather, we are concerned with whether the time for giving a notification of the kind required in order to obtain the statutory extension afforded by s 40(3) is, on the facts in the present case, to be adjudged taking into account knowledge of Knox even though the insured seeking cover is UCPT. 4. In our view, for reasons which follow, on the proper construction of s 40(3), the awareness referred to in the provision includes awareness that would be attributed to the insured (relevantly, UCPT) under the contractual arrangements that have been established between the insured and the insurer for the purposes of the policy in respect of disclosure and notification of claims. 5. The policy objective that is carried into effect by s 40(3) as explained in Newcastle City Council v GIO General Ltd is to add cover where there is no claim to be notified during the policy term but there is awareness and notification of facts that might give rise to a claim. Like many provisions in the Insurance Contracts Act, s 40(3) operates on the basis that there is a policy of insurance with the legislation modifying its contractual operation. It assumes the existence of a policy of insurance. 6. In those circumstances, it would be most odd if the parties had agreed arrangements between them as to the repository of knowledge for the operation of the policy when it comes to disclosure and notification of claims, but those agreed arrangements were irrelevant to the extent of the awareness that was required for the statutory extension. 7. Section 40(3) simply refers to facts of which the insured became aware. It might be said that the requirement for notice to be given indicates that the provision requires actual awareness on the part of the insured because without such awareness the notice cannot be given. But the provision does not require notice be given of facts of which the insured is aware. Rather it provides that where the insured gives notice the insurer will not be relieved of liability. That is to say, the form of the provision imposes a responsibility on the insured that must be satisfied in order to obtain the statutory extension in cover. It is consistent with that form that the provision contemplates that the burden falls upon the insured to ensure that it is able to give the required notice. 8. Section 40(3) should be construed as applying to 'facts that might give rise to a claim against the insured' in the same way that the policy would apply to claims of which the insured was aware. The rule of attribution that would advance the policy of the provision is one which would treat knowledge for the purposes of duly discharging agreed notification and disclosure obligations under the policy as knowledge for the purposes of s 40(3). The contractual question 1. Therefore, it is necessary to consider the contentions advanced for UCPT as to the proper construction of the policy terms concerned with notification. There were two aspects to those contentions that are relevant for present purposes. First, a reliance upon the terms of the notification provision which provided that the reference to 'the Insured' in that provision shall mean 'the General Secretary of the Synod'. Second, the composite nature of the policy whereby its terms were to apply to each insured as if it was the only party named as the Insured. 2. As to the first contention, UCPT contends that the claims to be notified under the policy are those that are known to the General Secretary of the Synod. At the same time, it maintains that under the coverage clause a claim that is first made against an insured during the period of cover is brought within the indemnity afforded by the policy. It can be seen that UCPT's case brings about a disconnection between the scope of coverage and the scope of the notification obligation. It also brings about the uncommercial consequence that Allianz would not have the benefit of notification of a claim despite being liable to indemnify. 3. The better construction of the notification clause is that it afforded the parties the benefit of a clear channel of communication for a policy that covered many insureds within the umbrella of the Uniting Church. As we have seen, the Synod had a form of overall administrative responsibility for the activities of the Church. It made the insurance arrangements for all the insureds and obtained information from them for the purposes of making those arrangements. In those circumstances, the making of a claim against any insured was a matter to be notified by the General Secretary of the Synod. For each individual insured, its responsibility was to notify the Synod. This meant that both the placing of the cover as part of an overall policy and the administration of claims under that cover could be handled as between the Synod and Allianz. 4. Therefore, if a claim was made against UCPT (or Knox) but the General Secretary of the Synod was not aware of that claim, then it could not be said that there was no obligation to notify. Further, it could not be said that there had been no failure to disclose for the purposes of the policy because the General Secretary did not know of the claim. 5. As to the second contention, there is an issue as to whether UCPT as one insured could have its cover affected by the knowledge of another insured, Knox. Put another way, if a claim was made against Knox but it was not notified by the General Secretary and then UCPT was sued as nominal defendant at a later time, could UCPT inform the General Secretary at that later time without UCPT itself being in breach of the notification condition by reason of the failure to notify at the earlier time? 6. The character of composite policy arrangements was considered in Arab Bank Plc v Zurich Insurance Co [1999] 1 Lloyd's Rep 262. The question in that case was whether the fraud of one insured in the formation of the policy forfeited the policy in respect of other innocent insureds. As there explained, ordinarily a composite policy should be construed as a bundle of separate contracts: at 277; see also 272. Further, the fraud of one insured was not to be attributed to another. 7. However, the question here is different because of the role of the General Secretary of the Synod when it comes to notifications. Further, as Derrington J has explained, the coverage afforded by the policy is in respect of work carried out in the conduct of the Insured's Profession. 8. This is not the type of composite policy where each insured may notify the insurer of claims made against it. In the present case, all insureds must notify through the General Secretary. That aspect of the policy means that in the special case where UCPT seeks indemnification on the basis of its liability as a nominal defendant for the conduct of Knox, there is an obligation under the policy for Knox to notify. Further, the coverage provided is in respect of a liability arising from the conduct of Knox. That is to say, it is only Knox that might be expected to know. 9. The particular question in this case was whether UCPT's coverage for claims made against it as a nominal defendant in respect of work carried out by another insured (Knox) was required to be notified by the General Secretary 'as soon as practicable' after Knox became aware of the claim for the purposes of the cover provided to UCPT. 10. In the very unusual circumstances of the present case where all notifications were required to be given by the General Secretary of the Synod and UCPT has coverage both as to its own liabilities and as to additional liabilities as nominal defendant, it seems to us that knowledge of Knox is knowledge of UCPT for the purposes of notification of a claim where the liability of UCPT is as a nominal defendant in respect of the claim against Knox. Put another way, if Knox is aware of a claim, the notification provision requires the General Secretary to notify the claim and a failure to do so is a failure by both Knox and UCPT. The use of the central conduit between the Uniting Church and Allianz qualified the extent to which the composite policy operated in an entirely independent manner. It means that, at least to the extent of the liability of UCPT as a nominal defendant for the liability of another insured, UCPT was burdened with the consequence of a failure by that insured to inform the General Secretary of a claim where it meant that there was a failure to notify. 11. This conclusion is supported by a consideration of the surrounding circumstances known to the parties. The nature and extent of the requirements of the policy in relation to notification by the General Secretary of the Synod as 'the Insured' should be construed in the context of the quotation slip. As has been explained, the quotation slip emphasised the need for any allegation, or the discovery of any circumstance which indicates the possibility of a claim arising, to be immediately reported to the General Secretary of Synod for notification to Allianz. This is a matter that each insured should be taken to know. 12. All the more so where, as here, those arrangements actually contemplated the application of s 40(3) and identified who must provide information about facts of which they are aware in order to ensure that the extension was obtained thereby indicating that there would be no extension if that awareness was not communicated to the insurer. Conclusion 1. Therefore, based on the preceding discussion, the awareness of Knox was awareness of facts for the purposes of the policy. When it came to disclosure and notification of the relevant claims it was the knowledge of Knox as the institution or agency whose conduct gave rise to the insured liability that informed the extent of those obligations and, in consequence, the awareness for the purposes of s 40(3) which was required to be notified by the General Secretary for the purposes of coverage of Knox as an insured and for UCPT as a nominal defendant in respect of the same liability. An alternative 1. If we are wrong in that view then, for reasons which follow, where, as here, the cover is for liability assumed as a nominal defendant, the awareness of facts that might give rise to a claim, includes awareness on the part of the person whose actions might give rise to liability on the part of the nominal defendant. 2. As has been explained, UCPT as nominal defendant and Knox as substantive defendant may each be subjected to proceedings and consequent liability to pay compensation or damages to the claimant in respect of the very same cause of action (noting that the only legal liability is with Knox). A claimant could elect to proceed against UCPT or Knox. That is not because their liabilities are joint or several or otherwise concurrent in some way. Nor is it an instance where separate causes of action may provide a basis for recovering the same loss against different parties. Rather, the liabilities are co-extensive and in both instances arise from the legal liability of Knox to the claimant. Consequently, the facts that might give rise to a claim will be facts concerning Knox, not UCPT. 3. Further, if a party chose to proceed against Knox by bringing proceedings against the members of the unincorporated association or against some of its officers (rather than to proceed against UCPT as the nominal defendant) then it would be no answer to that claim to say that the proceedings could be brought against UCPT. The Uniting Church could not compel that course by its unilateral conduct in providing in regulations made pursuant to the constitution that governed its affairs that claims could be brought against UCPT. If a claimant proceeded against the members of Knox or its officers then those defendants would be covered under the policy on the basis that they are included within the definition of 'the Insured' and were carrying out an activity that was within the 'Insured's Profession'. If such a claim was brought, it could hardly be said that the question whether the statutory extension provided for by s 40(3) was afforded to the defendants to those proceedings was to be determined by reference to the state of knowledge of UCPT. 4. It is the notice of known facts that might manifest the insured risk that is the basis for the statutory extension. It is also the case that a failure to give notice as soon as reasonably practicable means that there is no extension. That aspect of the provision affords protection to the insurer. Its effective operation depends upon awareness of facts that might give rise to a claim in turn giving rise to a requirement to notify those facts as soon as reasonably practicable. 5. As has been explained, in the peculiar instance where the liability of the insured is as a nominal defendant, the facts that might give rise to a claim against that insured are the facts that might give rise to a claim against the substantive defendant. 6. Having regard to the language used ('facts that might give rise to a claim') and the purpose of the provision, where the insured is covered for liability as a nominal defendant (as is the case with UCPT) it is awareness of the insured of the facts that might give rise to a claim against the substantive defendant that is relevant. Issue (3): If no to (2), did the primary judge err in failing to find, for the purposes of applying s 40(3), that UCPT was aware of the contents of LKA2? 1. As we have determined Issue (2) in the affirmative, Issue (3) does not arise. However, we will deal briefly with the alternative raised by Issue (3). It is a challenge to factual findings by the primary judge as to what may be concluded concerning the actual awareness of UCPT. 2. As to the knowledge of officers of UCPT, Allianz contended, in the alternative, that it should be inferred that the officers of the Synod of the Uniting Church in New South Wales were aware of LKA2 before it was provided to the Ombudsman as part of the statutory reporting process that was undertaken by Knox. It was alleged that UCPT was 'thereby' informed of LKA2 by 30 January 2006 at the latest and the primary judge was in error in not so finding. 3. The case advanced by Allianz before the primary judge was that UCPT had received LKA2: PJ[611]. The primary judge did not accept that claim. The case for Allianz on appeal was that it should be inferred that LKA2 was provided to senior officers within the Synod and thereby to UCPT. It put the same matters that were relied upon before the primary judge. 4. We are not persuaded that the reasoning of the primary judge as to when senior officers within the Uniting Church came to be aware of LKA2 was in error. Those findings were to the effect that as at 2009, those officers had not seen LKA2: PJ[657]. There is the further problem that Allianz does not demonstrate how any such knowledge would be knowledge of UCPT. It says that it is hampered in that regard by the extent of its knowledge of the internal operations of the Uniting Church. However, it was able to press for disclosure as to such matters if they were considered important. It allowed the course whereby the proceedings before the primary judge were conducted on the documents. It could have required such matters to be addressed by evidence from witnesses who could have been cross-examined. Issue (4): Before the primary judge, was the case for Allianz pleaded and conducted in a way that foreclosed the case that it seeks to advance on appeal concerning the significance of the contents of LKA2? 1. As Derrington J has explained, UCPT complained that the approach that Allianz was taking was inconsistent with its approach during the currency of the policies. It sought to attribute the change of position of Allianz to its commercial unhappiness with the fact that UCPT did not continue to insure with Allianz. We agree with Derrington J, for the reasons his Honour gives, that these submissions were relevant, if at all, solely to questions of estoppel, waiver and good faith. 2. As to the claim by UCPT that the case as now advanced was not put to the primary judge, the position is that the case as now presented was advanced in the written closing submissions before the primary judge, bearing in mind that the case proceeded on documents without any oral evidence. Allianz provided a comparison between its submissions before the primary judge and those advanced on appeal and they demonstrate that, in substance, the points now made were made before his Honour. 3. Further, there appears to have been some concern raised before the primary judge as to whether that aspect of the case went beyond particulars provided by Allianz. In that regard the primary judge made clear that he was not willing to have that aspect determined on the basis of a procedural point. His Honour made clear that UCPT would be allowed to reopen and to make further oral submissions if they considered that course to be necessary in order to deal with those submissions. UCPT did not do so and filed very detailed written submissions. 4. As to the contents of LKA2, the primary judge indicated to the parties that he proposed to read the whole of those materials given their significance and he was given a folder in hard copy for that purpose. A hard copy in the same form was provided to each member of the Court on appeal. 5. In those circumstances, the case advanced by Allianz on appeal as to the significance of the contents of LKA2 was not foreclosed. Issue (5): Having regard to the answers to (1) to (4), should the primary judge have found that UCPT could not rely upon the benefit of s 40(3) to the extent of all or some (and if so, which) of the claims found to have been notified in policy years after 31 March 2004? 1. As we have explained, the contents of LKA2 were such that a notification of its terms would have covered all of the claims notified in subsequent policy years. Therefore, any notification of facts that might give rise to claims that was given in subsequent policy years would not have been made as soon as reasonably practicable after there was awareness of those facts for the purposes of the statutory extension provision in s 40(3). It follows that as to all such claims there could be no statutory extension to include those claims in subsequent policy years. 2. Put another way, an insured who is aware of relevant facts that might give rise to a claim before entering into a claims made or claims made and notified policy of insurance, cannot then notify those facts during the term of a successive policy and obtain the benefit of the statutory extension under the successive policy. So much was accepted by senior counsel for UCPT in the course of oral submissions on the appeal. 3. Accordingly, as it was the statutory extension that was the fulcrum of the claim advanced by UCPT before the primary judge, subject to the resolution of Issue (6), Allianz must succeed in its appeal. Issue (6): Does s 54 of the Insurance Contracts Act apply to a failure to notify as soon as reasonably practicable after the insured becomes aware of facts that might give rise to a claim? 1. We agree with Derrington J that s 54 of the Insurance Contracts Act does not apply to a failure to notify such that it may be called in aid in some way to give rise to the statutory extension provided for by s 40(3) in those instances where the insured has failed to notify as soon as reasonably practicable after becoming aware of facts that might give rise to a claim. Issue (7): Should the primary judge have found that LKA2 recorded a fact, circumstance or occurrence that may give rise to a claim for the purposes of Exclusion 7c? 1. In the successive claims made policies entered into between the Uniting Church and Allianz for insurance cover from and after 31 March 2005 there was an exclusion (Exclusion 7c) for 'any Claim, fact, circumstance or occurrence … of which the Insured is aware before the commencement of the Period of Insurance, which may give rise to a claim'. 2. For UCPT it was emphasised that construing the terms of s 40(3) was not the same as construing Exclusion 7c. Further, in construing the exclusion in the policy, it was necessary to have regard to its character as an exclusion. 3. Substantially for reasons given by Derrington J, awareness of the contents of LKA2 was awareness of a fact, circumstance or occurrence for the purposes of Exclusion 7c. Therefore, on the terms of the successive policies, notifications made during the policy period for any of those policies were for coverage that was excluded unless Issue (8) is determined favourably to UCPT. We would reach that conclusion even if the standard of awareness for the purposes of Exclusion 7c was said to be higher than for s 40(3) by reason of the use of the word 'may' instead of 'might' when describing the degree of likelihood required. Issue (8)(a): If yes to (7), is the operation of Exclusion 7c limited by the terms of s 33 of the Insurance Contracts Act to instances specified in s 28 on the basis that it specifies the extent of the insurer's right in respect of breach of the duty of disclosure imposed by s 21? 1. Broadly speaking, s 21(1) of the Insurance Contracts Act provides that, subject to the Act, an insured has a duty to disclose to the insurer before the relevant contract of insurance is entered into every matter that is known to the insured that is relevant to acceptance by the insurer of the risk. Further, before a contract of insurance is entered into, the insurer must inform the insured of the general nature and effect of the duty of disclosure: s 22(1). These provisions are concerned with what the parties must do before entering into a contract of insurance. 2. Section 28 provides: (1) This section applies if a relevant failure occurs in relation to a contract of general insurance, but does not apply if the insurer would have entered into the contract, for the same premium and on the same terms and conditions, even if the failure had not occurred. (2) If the relevant failure was fraudulent, the insurer may avoid the contract. (3) If the insurer is not entitled to avoid the contract or, being entitled to avoid the contract (whether under subsection (2) or otherwise) has not done so, the liability of the insurer in respect of a claim is reduced to the amount that would place the insurer in a position in which the insurer would have been if the relevant failure had not occurred. 1. A failure by the insured to comply with the duty of disclosure is a 'relevant failure': s 27AA. 2. It may be observed that s 28 is concerned with qualifying the right of an insurer who has entered into a contract of general insurance to 'avoid the contract'. Its terms must be construed having regard to s 33 (which is in the same Division as s 28). It has been quoted but we repeat it here for ease of reference. It provides: The provisions of this Division are exclusive of any right that the insurer has otherwise than under this Act in respect of a failure by the insured to disclose a matter to the insurer before the contract was entered into and in respect of a misrepresentation or incorrect statement. 1. Therefore, the effect of s 28 read with s 33 when applied to a non-fraudulent breach by the insured of the duty of disclosure is that the only remedy that the insurer has is that provided for by s 28(3). It adjusts the extent of the insurer's liability by accounting for any actual prejudice to the insurer arising out of the non-disclosure. 2. In the context of a fraudulent failure to disclose past claims history, in Advance (NSW) Insurance Agencies Pty Ltd v Matthews (1989) 166 CLR 606, the statutory scheme was described in the following terms at 615 (Mason CJ, Dawson, Toohey and Gaudron JJ): The evident intention of the legislature is to replace the antecedent common law regulating non-disclosure, misrepresentations and incorrect statements by insured persons before entry into a contract with the provisions of Pt IV. To that extent Pt IV is a statutory code which replaces the common law. Accordingly, the circumstances in which it is legitimate to resort to the antecedent common law for the purpose of interpreting the statute are extremely limited … 1. However, Exclusion 7c is not, in terms, concerned with the duty of disclosure, misrepresentation or incorrect statements. It is concerned with whether the cover will extend to cover risks known to the Insured at the time the policy is arranged. 2. As the reasoning of Derrington J explains, there is a relevant conceptual distinction between a policy term that deals with the duty of disclosure and a policy term that defines the extent of the cover to be afforded to the insured. Significantly, s 21, s 22 and s 28 assume that the risk that is to be assumed by the insurer under the policy (that is the extent of proposed cover) is known. The extent of the disclosure obligation is determined by what is relevant to a decision by the insurer whether to provide insurance cover for the risk. Therefore, those provisions are drafted on the basis that they engage with a proposed policy of insurance in which the extent of cover is described. 3. As is further explained by Derrington J, by long established practice (in existence at the time of enactment of the Insurance Contracts Act) policies of insurance have defined the extent of cover by a general description of risk with specified exceptions. Accordingly, it may be expected that a policy of insurance would define the covered risk in that way and the statutory provisions should be considered in the context of that well established aspect of insurance practice. 4. A description of cover as excluding instances where there had been a breach of the duty of disclosure would not be a description of an exception. It would not define a type of risk that the insured was willing to cover. It would, instead, seek to confer a right to limit that cover if the insured had failed to disclose those matters that were required to be disclosed by the duty of disclosure. It would impose a condition the operation of which depended upon the extent of disclosure. Put another way, the extent of cover would be dependent upon the extent of disclosure. A provision of that kind would result in a form of circularity when it came to the application of the provisions in the Insurance Contracts Act dealing with the duty of disclosure. In our view, it would be caught by s 33 because it would confer a right upon the insurer 'otherwise than under [the] Act in respect of a failure by the insured to disclose a matter to the insurer before the contract was entered into'. The Act contemplates that performance of the duty of disclosure is to be adjudged by reference to the risk being assumed. If the risk being assumed is defined by reference to whether the duty of disclosure has been performed then the regime by which the rights of an insured for failure to perform that duty are specified in the Act would be frustrated. Accordingly, specification of risk in that way is to be disregarded for the purposes of applying those provisions. 5. However, the contentious exclusion in the present case is not of that character. Exclusion 7c removes from cover claims, facts, circumstances or occurrences that are known to the Insured. An exclusion of that kind does not depend upon whether there has been performance of the duty of disclosure. It is an exclusion that operates whether or not there is disclosure prior to entry into the contract of insurance of the matters of which the Insured is aware. As Derrington J has explained, it is a form of provision that is a true exclusion because its terms are consistent with the nature of insurance. Policies of insurance provide cover for risks, not for fortuities that are known or risks that are already manifest. The exclusion of risks of that kind is consistent with delimiting the extent of cover rather than conferring a right upon the insurer in the event of a breach of the duty of non-disclosure. 6. Otherwise, we agree with the reasoning of Derrington J to the effect that s 33 does not affect the operation of Exclusion 7c. 7. The position contended for by UCPT has been found to be arguable: Macquarie Underwriting Pty Ltd v Permanent Custodians Limited [2007] FCAFC 60. So much must be accepted. However, the point now falls to be determined. For reasons that have been given, the contentions advanced for UCPT should not be accepted. Issue (8)(b): If yes to (7), is Exclusion 7c void for inconsistency with the Insurance Contracts Act by operation of s 52? 1. By separate contention, UCPT relies upon s 52(1). It provides: Where a provision of a contract of insurance (including a provision that is not set out in the contract but is incorporated in the contract by another provision of the contract) purports to exclude, restrict or modify, or would, but for this subsection, have the effect of excluding, restricting or modifying, to the prejudice of a person other than the insurer, the operation of this Act, the provision is void. 1. It is appropriate to focus upon that aspect of the statutory provision which makes void a provision in a contract of insurance which has 'the effect of excluding, restricting or modifying, to the prejudice of a person other than the insurer, the operation of this Act' (emphasis added). 2. The case for UCPT was that Exclusion 7c had the effect of excluding, restricting or modifying the operation of the provisions of the Act in relation to non-disclosure and did so to the prejudice of UCPT. It claims that its failure to disclose LKA2 prior to entry into successive policies would have been regulated by the provisions of the Act in relation to breach of the duty of disclosure if Exclusion 7c had not been included. 3. An effect of Exclusion 7c is that it confines the coverage under the policy to an extent that is dependent upon the awareness of the Insured before the commencement of cover of facts, circumstances or occurrences that may give rise to a claim. If that exclusion were not in the policy then a failure by UCPT to disclose those facts before entering into the policy would engage s 28. If that were so, in order to be able to deny all liability to UCPT, Allianz would need to demonstrate that it would not have insured if it had known about the fact that by reason of the contents of LKA2 and the circumstances in which it was prepared, UCPT was aware of facts that may give rise to the breadth of claims that were subsequently notified. In that regard, as has been explained by Derrington J, UCPT sought to make much of the fact that Allianz did not proceed with a defence based upon alleged non-disclosure. 4. In our view, it is significant for present purposes that the Insurance Contracts Act requires cover to be extended in the manner provided for by s 40(3). In consequence every claims made policy in Australia covers facts that might give rise to a claim if they are notified during the policy period. Therefore, at least to that extent, the legislature has required insurers to extend cover to which they had not agreed. They are also unable to avoid the policy even where there has been non-fraudulent non-disclosure in relation to a contract of general insurance. Instead, insurers must provide the extent of cover to which they would have agreed had they known. These are significant and intended inroads into the extent to which an insurer can define by the policy terms the extent of cover. 5. Further, in order to prevent the effect of these (and other provisions) being undermined by carefully drafted policy provisions, the Act has a 'contracting out' prohibition that extends to provisions in a contract of insurance that have the effect of excluding, restricting or modifying the operation of those provisions. 6. If an insurer is able to include a provision which, in substance, makes any failure to disclose a fact that might give rise to a claim of which the insured is aware at the time of entry into the policy a matter that means there is no cover under the policy for such claims then that will exclude or restrict the operation of the disclosure provisions. It will mean that conduct which would otherwise be a failure to perform the duty of disclosure will instead become a matter that results in exclusion from cover. Whilst the two matters are conceptually distinct for the purpose of insurance arrangements it does not mean that, for the purposes of s 52, a provision expressed as an exclusion from cover is outside the scope of provisions to which s 52 applies because they have the requisite effect. 7. In our view, it is significant that Exclusion 7c operates by reference to a very broad description of any 'fact, circumstance or occurrence … of which the Insured is aware before the commencement of the Period of Insurance, which may give rise to claim' (emphasis added). It is addressing the state of knowledge of the Insured before entering into the policy as to a very wide range of matters that would otherwise be matters that would be the subject of the duty of disclosure. 8. Further, the effect of Exclusion 7c is that the duty of disclosure does not apply to those matters, because they become matters that are not covered. There is no need to disclose matters which do not bear upon the risk that is to be insured. However, the essential nature of the risks that are covered by the policy are the same. That is to say, it will still cover the kinds of fortuities that are described in terms that do not resort to the state of knowledge of the insured as to whether there are facts of which it is aware that may give rise to them. 9. In effect, Exclusion 7c transforms what is a matter for disclosure (what the insured knows that bears upon the decision by the insured whether to accept the risks to be insured) into a general exclusion from cover in all instances. Its effect is to substantially exclude the application of the duty of disclosure provisions to the policy. For those reasons, Exclusion 7c is void by operation of s 52. 10. Of course, if there is disclosure of facts that might give rise to a claim, as there would need to be, then the insurer may decide to expressly exclude the disclosed matter. To do so would be to include a provision that was consistent with the provisions of the Act in relation to the duty of disclosure. If there was a failure to disclose and the insurer would have declined cover then there will be no liability on the part of the insurer to pay. 11. As Derrington J has exposed, this outcome is a balancing of the interests of the insurer and insured that favours the insured. It requires an insurer in such cases to establish that it would not have extended cover or the extent to which it would have excluded cover if it had known of the non-disclosed matters at the time of entry into the policy. But, in our respectful view, that is not a reason to reject UCPT's contentions as to s 52. That is because it is to do no more than identify the consequence of implementing a policy objective that is manifest in the non-disclosure provisions. The contracting out provision in s 52 is designed to ensure that measures are not taken to avoid that intended operation of the Act. 12. For those reasons, had we determined that the requirements of s 40(3) had been met such that the relevant policies were engaged then, applying s 52 of the Insurance Contracts Act, we would not have concluded that Exclusion 7c applied to exclude that coverage. 13. As has been mentioned, Allianz does not raise any issue as to the claims made during the term of the policies for which it has agreed to provide indemnity. For that reason, the issue is whether, by operation of s 40(3), the notification of facts that might give rise to a claim during the period of the policies means that the coverage extends to claims brought after UCPT replaced its insurance cover. For reasons that have been given, s 40(3) does not apply because notification did not occur as soon as was reasonably practicable. Issue (9): If by reason of the answers to the above issues the primary judge was in error as to any of the findings as to notifications, do principles of estoppel, waiver or utmost good faith mean that Allianz cannot rely upon any failure to notify matters in LKA2? 1. Given the conclusion that we have reached as to Exclusion 7c, Issue (9) only arises insofar as it was advanced by UCPT as a basis for a claim that Allianz is prevented from contending that the notifications were ineffective for the purposes of s 40(3) of the Insurance Contracts Act. However, if we are wrong in the conclusion we have reached about the application of s 52 to Exclusion 7c, then there is also an issue as to whether Allianz is prevented from relying upon the exclusion. 2. In either case, substantially for the reasons given by Derrington J, we agree that Issue (9) must be decided in the negative with one qualification. In part, his Honour's reasoning proceeds on the basis that UCPT's states of mind were unlikely to be relevant. We have taken a different view to Derrington J as to that aspect. However, making due allowance for that difference between us, his Honour's reasoning explains cogently why, on either of our approaches, Allianz has not demonstrated any basis upon which its alternative claims based upon principles of estoppel, waiver or utmost good faith must succeed. 3. We would add that the course adopted by UCPT of seeking to advance its appeal by seeking to incorporate large parts of very long written submissions before the primary judge is one that should not be adopted without leave of the appeal court to do so. On an appeal the parties must formulate submissions that address the issues on appeal. Closing submissions at trial are formulated for a judge who has had the conduct of all issues and is expected to address all of them. Appeal judges do not repeat that process. 4. In the present case, the primary judge did not address in any detail the claims advanced by UCPT as to estoppel, waiver and good faith. UCPT invited this Court to deal with those claims, in effect, unaided in any significant way. If procedural directions were required in order to enable that to be done then they should have been sought. The difficulties that arise have been traversed by Derrington J. In the circumstances, the case as advanced can only be addressed in the terms in which it was explained in the course of the appeal. It is not for this Court on appeal to go back and try and extract from the very substantial materials before the primary judge some further understanding of how the case was articulated. Issue (10): If the primary judge was in error as to the finding that claims by current or former students arising from sexual misconduct by Mr Nisbett were notified as soon as reasonably practicable in the policy year to 31 March 2008, should the primary judge have found that such claims were notified during the policy year to 31 March 2007? 1. UCPT contended that if the primary judge had been in error in finding that LKA2 disclosed no more than the bare possibility of a claim and should have found that LKA2 did contain facts that might give rise to claims of sexual misconduct, then those facts were limited to claims by two of the claimants identified as TPC2 and PTPC3. 2. For reasons that have been given, the matters disclosed by LKA2 were not so confined. Therefore, Issue (10) must be determined in the negative. Issue (11): If there is coverage for UCPT for the 'problem' then save for individual claims for which Allianz raises no issue on the appeal, is that coverage only under the policy for the year ended 31 March 2009? 1. Given the conclusions we have reached as to other issues, Issue (11) does not arise. However, we will deal with it briefly. To do so, it is necessary to assume (contrary to the reasoning already expressed) that the facts of which a reasonable reader would become aware from reading LKA2 at the time it was provided to Mr Weeks of Knox and in the context in which it was obtained were not facts that might give rise to a claim. On that assumption, failure to notify them to the insurer in the policy year ending 31 March 2005 would not be a failure to notify as soon as practicable. Nor would those matters fall within Exclusion 7c. Consequently, coverage could arise under later policies when further factual matters became known to Knox. 2. Further, for the purposes of the appeal grounds advanced by Allianz which give rise to Issue (11), Allianz does not challenge the findings of fact as to what was known by UCPT. It challenges the legal characterisation of the conclusions that should be reached based on those findings. 3. On the unchallenged findings of the primary judge, Ms Blacker (acting for UCPT, Knox and Allianz) attended Knox in the course of the 2007-2008 policy year and inspected LKA2. Ms Blacker was found to be the means by which the contents of LKA2 were notified to Allianz at that time. So, by 31 March 2008, there was no issue that insured and insurer were aware of the contents of LKA2. 4. Therefore, as the primary judge recognised, the contents of LKA2 would be part of the store of knowledge that Mr Weeks and the school council members would possess when considering the significance of any further facts of which they became aware. 5. The primary judge was of the view that subsequent facts came to the attention of relevant officers over time such that the field of possible claims expanded over time. We have explained the course of that reasoning earlier in these reasons. 6. His Honour drew a distinction between the 2008-2009 policy period and later policy periods on the basis that the awareness of the extent of the problem increased over that period: PJ[461]‑[538]. In particular, his Honour viewed the problem in the 2008-2009 year as being 'largely confined' to three teachers who were arrested in February 2009: PJ[466]. One of those teachers was Mr Nisbett. The primary judge found that claims based upon conduct by Mr Nisbett had been notified under earlier policies and that aspect does not appear to be in dispute. That is to say, Allianz raises no issue as to those claims in the appeal. However, there were two others who were arrested, Mr Treloar and Mr Stewart. Media reports at the time referred to the police having called for more alleged victims and their families to come forward as they investigated expanding allegations of paedophilia at Knox. As to those developments, the primary judge found (at [461]): No longer were the allegations purely historical in nature and distilled in a confidential report. The arrests and the media reporting of their subject matter gave an immediacy to the historical complaints contained in the LKA Reports and Materials. To the extent necessary, I accept the UCPT's submission that only at that point did it become a 'problem' that might give rise to claims, which the UCPT notified Allianz of as soon as was reasonably practicable within the meaning of s 40(3). 1. His Honour then reasoned that it was important 'not to approach the consideration of these matters ahistorically or with hindsight bias': at PJ[463]. His Honour continued: The mere fact that a complainant did not come forward at a time when attitudes towards the institutional abuse of children were somewhat different is explicable. From an institutional perspective, this shift in attitudes might also explain changes in the suggested remedial response taken by schools when faced with allegations that certain teachers or staff sexually abused students. Seen in this light, it is not difficult to imagine the response to the contents of the LKA Reports and Materials being very different today, compared to the years 2003-2004. The objective question of characterisation that the terms of s 40(3) pose necessitates a consideration of such context. 1. Respectfully, we do not agree. As we have explained, by 2003-2004 Knox was subject to express statutory obligations concerning allegations of sexual abuse of students in their care. Concerns as to the seriousness of the historical allegations as to conduct by Mr Nisbett were what prompted Mr Weeks to engage Mr Wilson. The materials in evidence disclosed that schools were informed of the nature of grooming behaviour and its insidious nature. No doubt public awareness of the consequences for those who had been abused and growing evidence of the extent of the problem within institutions gave rise, over time, to increased public pressure for a national response. However, that is not to say that in 2003-2004 a person reading LKA2 would not have understood that it was pointing to a problem that involved more than three teachers and a few students. 2. Ultimately, the finding by the primary judge as to the extent of awareness and notification in the 2008-2009 policy year was as follows (at [464]): For these reasons, the first and second bulk notifications were effective for the purposes of s 40(3) as notifications of facts that might give rise to claims against the UCPT by those claimants who were expressly identified in the letters and who later advanced claims against the UCPT for loss arising from sexual or physical assault by former teachers of KGS; and by any other claimants sharing the particular characteristics identified in the letters, namely, former students of KGS who suffered loss arising from sexual or physical assault by Treloar or Stewart. 1. Respectfully, the arrest of three teachers would have caused any reasonable person with responsibility for the affairs of the school, who was also aware of the contents of LKA2 to conclude that there was a distinct possibility that the 'problem' extended beyond those three teachers. Indeed, the 'bulk notifications' to which the primary judge referred in the above passage were not couched in language that confined their terms in the manner expressed by his Honour. They were much more broadly expressed. Before his Honour a contention had been advanced that they lacked the requisite specificity as to facts to constitute notification for the purposes of s 40(3) (an unattractive submission rejected by the primary judge and not pressed on appeal). 2. Having regard to aspects of LKA2 to which reference has already been made in these reasons when considered in the context of the dramatic events that unfolded in early 2009, it is difficult to see why increasing public awareness might be a reason why a person in the position of Mr Weeks and the school council members with their particular responsibilities and statutory reporting obligations would reach the view that the problem might be confined to conduct by the three teachers who, by that point in time had been arrested. That is especially so in a context where the police investigations were ongoing and requests had been made for the school to provide information concerning more than 70 named persons (referred to in the bulk notifications). 3. As to the following policy year, the primary judge reached the following conclusion as to facts properly notified for the purposes of that year (at PJ[500]): It follows that the third bulk notification was effective as constituting a notification of facts that might give rise to claims against the UCPT by those claimants who were expressly identified in the list of names and who later advanced claims against the UCPT for loss arising from sexual or physical assault by former teachers of KGS; and by any other claimants sharing the particular characteristics of those persons identified in the list of names, namely, former students of KGS, who suffered loss arising from sexual or physical assault by former teachers of KGS. Allianz was on notice of facts which disclosed a problem which might give rise to claims against the UCPT in respect of any former students who were the victims of sexual or physical abuse perpetrated by any other AP (including Vance, James and Barratt). 1. That is to say, his Honour accepted that there had been a general form of notification. For reasons that have been given, on the assumptions made for the purposes of Issue (11), the notifications in the 2008-2009 policy year covered all such claims. Therefore, again on the assumptions, there was a statutory extension under s 40(3) of the Insurance Contracts Act to cover those claims as well as those found by the primary judge to have been notified in the 2008-2009 years. 2. Accordingly, making the assumptions to which we have referred, were it necessary to have decided Issue (11), we would have determined that Issue in the affirmative. Conclusion and relief 1. It follows that we agree with Derrington J that the appeal should be upheld. The orders of the learned primary judge should be set aside to the extent sought. Allianz is entitled to the costs of the appeal. As to the costs of the hearing before the primary judge we would provide an opportunity for UCPT to make any submissions in writing as to why it should not be ordered to pay Allianz's costs of those proceedings. If no submissions are filed there should be an order to that effect. If submissions are filed, Allianz should have an opportunity to respond and that issue should be determined on the papers. I certify that the preceding two hundred and eighty-eight (288) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Colvin and McEvoy. Associate: Dated: 7 February 2025