Stealth Enterprises Pty Ltd t/as The Gentlemen’s Club v Calliden Insurance Limited [2017] NSWCA 71

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Stealth Enterprises Pty Ltd t/as The Gentlemen's Club v Calliden Insurance Limited [2017] NSWCA 71 Hearing dates: 19 August 2016 Decision date: 05 April 2017 Before: Meagher JA at [1]; Ward JA at [76]; Sackville AJA at [80] Decision: 1. Appeal allowed. 2. Judgment for the respondent ordered on 3 September 2015 be set aside. 3. Costs orders numbered 1 to 4 made on 12 September 2015 be set aside. 4. Judgment for the appellant against the respondent in the sum of $500,000. 5. Respondent pay the appellant's costs of the proceedings at first instance. 6. Respondent pay the appellant's costs of the appeal. 7. Direct the parties to confer and agree, if possible, as to the amount of interest if any payable by the respondent to the appellant under s 57 of the Insurance Contracts Act. Any such agreement is to be recorded in short minutes to be lodged with Meagher JA's associate within seven days of the date of the making of these orders. If the parties are unable to reach agreement within that time, they are to exchange and lodge with Meagher JA's associate within a further seven days written submissions addressing that question (those submissions in each case not to exceed three pages) which will then be decided on the papers. Catchwords: INSURANCE – property and liability insurance – where insured use of premises is as brothel – where claim under renewed policy for property damage as a result of fire – where appellant insured's sole director and manager were members of Comancheros bikie gang – where that association not disclosed to respondent insurer at time of renewal – whether reasonable person in insured's position could be expected to know that membership association relevant to insurer's decision to underwrite risk – Insurance Contracts Act 1984 (Cth), s 21(1)(b) – whether had disclosure been made insurer would not have been on risk at time of fire – Insurance Contracts Act (Cth), s28(3)