FAI General Insurance Co Ltd & Anor v McSweeney, Brian Albert & Ors (Part 4) [1998] FCA 1789

FEDERAL COURT OF AUSTRALIA

INSURANCE - misrepresentation - non-disclosure - meaning of expression Ňcircumstances which may give rise to a claimÓ in claims made and notified policy - whether facts which later give rise to a claim constitute Ňcircumstances which may give rise to a claimÓ at time of completion of proposal form - whether statements made in documents attached to earlier proposal form constituted misrepresentations - whether representations in fact made - whether contract of insurance may be avoided by reason of misrepresentations made temporally before but not in connection with the proposal for insurance contract sought to be avoided.

WORDS AND PHRASES - ŇbeforeÓ

Insurance Contracts Act 1984 (Cth), ss 21, 26, 28

Advance (NSW) Insurance Agencies Pty Ltd v Matthews (1989) 166 CLR 606, applied

Bayer Leverkusen Ltd v Phoenix Assurance Company (unreported, NSWCA, Moffitt, Hardie and Hope JJA, 19 March 1973), referred to

Bowling v Weinert [1978] 2 NSWLR 282, applied

EST Limited v HIH Casualty and General Insurance Ltd (unreported, SCVic, No 6938 of 1994, Mandie J, 27 October 1997), referred to

FAI General Insurance Co Ltd v Hendry Rae & Court (1993) 10 WAR 322, considered GamerŐs Motor Centre (Newcastle) Pty Ltd v Natwest Wholesale Australia Pty Ltd (1987) 163 CLR 236, applied

Holts Corrosion Control Pty Ltd v CML Fire & General Insurance Co Ltd (1984) 3 ANZ Cas 60-559, considered Pengelly v British Empire Assurance Co (1974) 38 DLR (3d) 624, considered

Schenker & Co (Aust) Pty Ltd v Maplas Equipment and Services Pty Ltd [1990] VR 834 at 840, applied

FAI GENERAL INSURANCE CO LIMITED v BRIAN ALBERT McSWEENEY & ORS

NG 312 of 1992

TRAVEL COMPENSATION FUND v FAI GENERAL INSURANCE CO LIMITED

NG 948 of 1992

REASONS FOR JUDGMENT (PART IV)

LINDGREN J

SYDNEY

24 APRIL 1998

TABLE OF CONTENTS REASONS FOR JUDGMENT (PART IV) INTRODUCTION ............................................................................................... 2 ISSUES ............................................................................................................... 3 General issues relating to misrepresentation .................................................... 3 General issues relating to non-disclosure........................................................... 6 The alleged 7 May 1990 representations ........................................................... 7 Effect under section 28 of the IC Act on misrepresentation and failure to comply with duty of disclosure .......................................................................... 8 MISREPRESENTATION GENERALLY ........................................................... 10 RENEWAL OF THE PMS POLICY FOR 1989-1990 - ALLEGED MISREPRESENTATION - THE TAG FACTS .................................................. 16 Issue (1) Was any partner of PMS, after enquiry, aware, on 22 May 1989, of the circumstances referred to in pars 1-26 of Part A of the Schedule (to FAIŐs third further amended statement of claim)? .......................................... 16 Issue (2) Did those circumstances described in Part A of the Schedule (to FAIŐs third further amended statement of claim) of which any partner of PMS was aware on 22 May 1989, satisfy the description of Ňcircumstance[s] which may give rise to a claimÓ in question 13 (b) (ii)? ................................... 20 Issue (3) If the answer ŇnoÓ to question 13 (b) (ii) was untrue, have PMS nonetheless established that McS, as the person signing the proposal form, gave that answer on the basis of a belief in fact held by him, being a belief that a reasonable person in the circumstances would have held? .................... 27 Issue (4) If the answer ŇnoÓ to question 13 (b) (ii) was untrue, has FAI established that McS, as the person who gave that answer, knew, or that a reasonable person in the circumstances could be expected to have known, that the answering of the question in that way would have been relevant to FAIŐs decision whether to accept the risk, and, if so, on what terms? ............. 27 RENEWAL OF THE PMS POLICY FOR 1989-1990 - ALLEGED NON-COMPLIANCE WITH STATUTORY DUTY OF DISCLOSURE - THE TAG FACTS ................................................................................................................ 28