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

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