Abstract

Article

The Reasonable Person’s knowledge for Disclosure

 

The question is as whether a reasonable person in the circumstances, knowing the matters known to the insured, including that the insurer regularly wrote cover for businesses of the insured kind and would know the general state of risks inherent in them, would know that the fact was relevant to its decision to accept the risk. Belief or suspicion, strong or otherwise, that the information would be relevant is not enough. It must be known to be so. The relevant information in the insured’s possession must disclose the existence of a state of affairs materially different from that which could be assumed to exist simply because the insured business was, and for some years had been, used in the normal way of such a business. Permanent Trustee Australia Limited v FAI General Insurance Company Limited (In Liquidation) (2003) 214 CLR 514; Stealth Enterprises Pty Ltd v Calliden Insurance Limited [2017] NSWCA 71 at [39]; Amashaw Pty Limited v Marketform Managing Agency Ltd [2017] NSWSC 612, affd Marketform Managing Agency Ltd v Amashaw Pty Ltd [2018] NSWCA 70.