Stealth Enterprises Pty Ltd t/as The Gentlemen's Club v Calliden Insurance Limited [2017] NSWCA 71
Court of Appeal of New South Wales
Meagher & Ward JJA; Sackville AJA
Insurance - appellant company owned and operated brothel - brothel's premises insured for fire and business interruption under policy renewed by respondent insurer - fire damaged premises and resulted in brothel ceasing to trade - insurer denied liability under policy on basis appellant failed to comply with disclosure obligations under Insurance Contracts Act 1984 (Cth) concerning association with bikie gang and lapse of business registration - primary judge found respondent entitled to reduce its liability under the policy to nil on basis of non-disclosure - s5D(3)(b) Civil Liability Act 2002 (NSW) - ss11(9)(b), 21, 28 & 57 Insurance Contracts Act 1984 (Cth) - Sch 4, Pt 1 Insurance Contracts Amendment Act 2013 (Cth) - ss8, 11 & 13 Prostitution Act 1992 (ACT) - held: not established that reasonable person could be expected to know association relevant to underwriting decision, or that insurer would not have renewed policy if disclosure of association made - insured aware of lapsed registration - not established insurer would not have renewed or otherwise insured premises at time of fire if lapsed registration disclosed - appeal allowed - judgment for appellant in sum of $500,000.
Stealth