Yorkville Nominees Pty Ltd v Lissenden [1986] HCA 6

Yorkville Nominees Pty Ltd v Lissenden [1986] HCA 6

The negative answer to the proposal question was warranted as true and incorporated as the basis of the policy. Because Mr. Brincat, one of the partners, was aware of circumstances likely to give rise to claims, the answer was false notwithstanding Mr. Pollard's innocence. Clause 4 of the policy was not inconsistent with the basis clause and was not rendered nugatory, since it could still operate for dishonest or fraudulent acts during the insurance period or for claims of which the partners were not aware when proposing. The insurers were therefore entitled to disclaim liability, so leave under s. 6(4) could not be granted.

Jurisdiction
Australia
Procedural Posture
Appeals by Special Leave Concerning Applications for Leave Under S. 6(4) of the Law Reform (miscellaneous Provisions) Act 1946 N.s.w. to Commence Proceedings Against Insurers / High Court Appeals From the Court of Appeal of the Supreme Court of New South Wales
Outcome
Appeals dismissed with costs.
Legal Topics
["accountants' Professional Indemnity Insurance" 'basis Clause' 'warranty of Truth of Proposal Answers' "insurer's Right to Disclaim Liability" 'statutory Charge on Insurance Moneys' 'leave to Proceed Against Insurer Under S. 6(4)']
['insurance Law' 'civil Procedure' 'professional Negligence'] ["accountants' Professional Indemnity Insurance" 'basis Clause' 'warranty of Truth of Proposal Answers' "insurer's Right to Disclaim Liability" 'statutory Charge on Insurance Moneys' 'leave to Proceed Against Insurer Under S. 6(4)']

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Procedural Posture

Appeals by Special Leave Concerning Applications for Leave Under S. 6(4) of the Law Reform (miscellaneous Provisions) Act 1946 N.s.w. to Commence Proceedings Against Insurers / High Court Appeals From the Court of Appeal of the Supreme Court of New South Wales

Legal Issues

  1. 1 ['Whether the appellants should have been granted leave under s. 6(4) of the Law Reform (Miscellaneous Provisions) Act 1946 N.S.W. to commence proceedings against the respondent as representative of the insurers.' 'Whether the insurers were entitled to disclaim liability because the negative answer to the proposal question asking whether any partner was aware of circumstances likely to give rise to a claim was false.' "Whether cl. 4 of the policy, extending cover to claims involving alleged dishonesty, mis-statement or fraud, prevented the insurers from relying on the falsity of the proposal answer where the partner signing the proposal was unaware of the other partner's fraud."]

Ratio Decidendi

The negative answer to the proposal question was warranted as true and incorporated as the basis of the policy. Because Mr. Brincat, one of the partners, was aware of circumstances likely to give rise to claims, the answer was false notwithstanding Mr. Pollard's innocence. Clause 4 of the policy was not inconsistent with the basis clause and was not rendered nugatory, since it could still operate for dishonest or fraudulent acts during the insurance period or for claims of which the partners were not aware when proposing. The insurers were therefore entitled to disclaim liability, so leave under s. 6(4) could not be granted.

Court Disposition

Appeals dismissed with costs.

Orders

  • ['Appeals dismissed with costs.']