Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788

The High Court of Australia considered an appeal by Allianz Australia Insurance Ltd against Delor Vue Apartments CTS 39788, concerning a dispute over an insurance claim following damage from Tropical Cyclone Debbie. Delor Vue, the body corporate for an apartment complex, had failed to disclose serious non-structural defects in the buildings to Allianz prior to entering into the insurance policy. While Allianz initially indicated it would honour the claim despite the non-disclosure, a dispute arose regarding the extent of the indemnity and the allocation of repair costs. Allianz subsequently sought to rely on section 28(3) of the *Insurance Contracts Act 1984* (Cth) to reduce its liability based on Delor Vue's non-disclosure.

The central legal issues before the High Court were whether Allianz was bound by its earlier representation of indemnity, thereby precluding it from relying on section 28(3) of the *Insurance Contracts Act* to reduce its liability. This involved determining whether the doctrines of waiver, election, or estoppel applied, and whether Allianz had breached its duty of utmost good faith by seeking to rely on the non-disclosure defence after initially offering indemnity. The High Court also had to consider the circumstances under which a gratuitous waiver of rights becomes irrevocable.

The High Court allowed Allianz's appeal, setting aside the orders of the Full Court of the Federal Court. The Court reasoned that Delor Vue had not established that it suffered any detriment in reliance on Allianz's representation of indemnity. Consequently, the limited circumstances in which a gratuitous waiver of rights becomes irrevocable were not present. The Court found that Allianz did not breach its duty of utmost good faith; rather, it acted lawfully and honestly by clarifying the extent of its offer of indemnity and requiring acceptance of that offer to waive its defence based on non-disclosure. The Court concluded that Allianz was not precluded from relying on section 28(3) of the *Insurance Contracts Act*.