The Owners – Strata Plan No 55682 v W. R. Berkley Insurance (Europe), PLC & Ors [2020] NSWDC 758

The Owners – Strata Plan No 55682 v W. R. Berkley Insurance (Europe), PLC & Ors [2020] NSWDC 758

The NMC (Nomads Motorcycle Club) tenant/occupancy was not adequately disclosed to the insurer or its agent before the insurance contract was entered into. This non-disclosure was material and entitled the insurer, under s 21(1) and s 28(3) of the Insurance Contracts Act 1984 (Cth), to reduce its liability to nil. The brokers (second and third defendants) were negligent in failing to ensure full and accurate disclosure, failing to advise the insured of the risk, and failing to seek or advise of alternatives, causing the insured's loss of indemnity. Damages were assessed by reference to the loss of enforceable insurance, not subsequent breach of policy. The insurer's cross-claim against the...

Parties
Plaintiff: The Owners – Strata Plan No 55682; First Defendant/first Cross Claimant: W. R. Berkley Insurance (Europe), PLC; Second Cross Claimant: Berkley Insurance Company; Second Defendant: HHIA Pty Ltd; Third Defendant: Mr D Hynes; Fourth Defendant: Ms L Honeychurch; Fifth Defendant: Westcourt General Insurance Broker Pty Ltd trading as Westcourt General Insurance Broker Pty Ltd ACN 009401772 as trustee for the WGIB Trust; Cross Defendant: QUS PTY LTD
Jurisdiction
Australia
Judgment Date
17 December 2020
Procedural Posture
Principal Judgment / Final Judgment
Outcome
Insured's claim against the insurer dismissed; cross-claim by insurer against agent dismissed; judgment for insured against brokers and AFS licensee; damages assessed against brokers and licensee at $538,347.41.
Legal Topics
Strata Insurance, Duty of Disclosure, Professional Negligence, Proportionate Liability, Damages, Policy Avoidance, Statute of Limitations, Breach of Contract, Loss of Rent, Estoppel, Evidence, Consequential Loss
Insurance Law Negligence Torts Civil Procedure Contract Law Strata Insurance Duty of Disclosure Professional Negligence +9 more

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Parties

The Owners – Strata Plan No 55682

Plaintiff

W. R. Berkley Insurance (Europe), PLC

First Defendant/first Cross Claimant

Berkley Insurance Company

Second Cross Claimant

HHIA Pty Ltd

Second Defendant

Mr D Hynes

Third Defendant

Ms L Honeychurch

Fourth Defendant

Westcourt General Insurance Broker Pty Ltd trading as Westcourt General Insurance Broker Pty Ltd ACN 009401772 as trustee for the WGIB Trust

Fifth Defendant

QUS PTY LTD

Cross Defendant

Procedural Posture

Principal Judgment / Final Judgment

Legal Issues

  1. 1 Whether the insured's non-disclosure of a motorcycle club's occupancy entitled the insurer to avoid the insurance policy under s 21(3) Insurance Contracts Act 1984 (Cth)
  2. 2 Whether the insurance broker was negligent in failing to disclose the occupancy or to warn of its significance
  3. 3 Whether damages were recoverable for failure of indemnity, including value of rebuilding and lost rent

Ratio Decidendi

The NMC (Nomads Motorcycle Club) tenant/occupancy was not adequately disclosed to the insurer or its agent before the insurance contract was entered into. This non-disclosure was material and entitled the insurer, under s 21(1) and s 28(3) of the Insurance Contracts Act 1984 (Cth), to reduce its liability to nil. The brokers (second and third defendants) were negligent in failing to ensure full and accurate disclosure, failing to advise the insured of the risk, and failing to seek or advise of alternatives, causing the insured's loss of indemnity. Damages were assessed by reference to the loss of enforceable insurance, not subsequent breach of policy. The insurer's cross-claim against the...

Court Disposition

Insured's claim against the insurer dismissed; cross-claim by insurer against agent dismissed; judgment for insured against brokers and AFS licensee; damages assessed against brokers and licensee at $538,347.41.

Orders

  • By 22 January 2021, plaintiff to bring in short minutes of order giving effect to reasons on interest and costs.
  • If disagreement remains, staged submissions timetable and dispositive orders on the papers.